Britons Paying Higher Tax Rate Will Shoulder Two Thirds of Total Bill By 2015

Britons paying the 40p and 45p tax rate will shoulder two thirds of the UK's total tax bill by 2014 to 2015.

According to HMRC's figures, higher tax rate payers will account for 67% of Britain's tax bill by the next year, even though they only comprise 16% of the population.

This equates to £116bn (€141bn, $196bn) of Britain's £172bn total tax bill.

HMRC data also shows that by 2014 to 2015 the top 1% of earners will pay 27.4%of Britain's tax bill, up from to 21.4% ten years ago.

The 40% tax band was introduced a quarter of a century ago by the former Conservative Chancellor Nigel Lawson.

At the time, only one in 20 people paid the higher rate, compared to one in six people today. This equates to about 1.35 million in 1988, compared to 4.4 million people in 2013.

Over the next year, this number is set to rise to five million.

Toppling into a Higher Tax Band

Politicians, including Lawson, has repeatedly called for UK Chancellor George Osborne to raise the bracket as, under the Coalition, more than a million additional middle income earners will have been dragged into the 40p and 45p rates over the next year.

Osborne neglected to make many changes to the tax brackets for higher rate payers in his March 2014 Budget announcement.

He did, however, raise the personal income tax allowance next year to £10,500 per person from £10,000, and slightly raised the threshold for the 40% tax bracket.

Osborne made the minor increase of the 40p tax threshold to £41,865, from £41,540.

Due to this decision, to not make many changes to the tax brackets, higher rate taxpayers will burden even more of the tax bill by more than two thirds, which is a significant increase from the total £91.9bn paid during the 2011 and 2012 year.

Recently, the Centre for Policy Studies has urged the UK government to axe the 45p tax rate and reduce capital gains tax in order to boost entrepreneurship in Britain, as the country significantly lags behind its US and Asian counterparts.

According to CPS's latest report, the number of people who earned at least £594m dollars through entrepreneurship, dubbed the "super entrepreneurs", is tiny Britain compared with other countries, because of the "strong correlation between high rates of [these type of self-made people] in a country and low tax rates and a low regulatory burden".

"The Work and Pensions Secretary was conflating self-employment with entrepreneurship. In reality, the two phenomena are quite different," said Dr Nima Sanandaji, one of the authors of the report.

"The Coalition's benefit reforms may well promote self-employment, which is a good thing in itself. But it is wrong to suppose that reducing benefits will do much for entrepreneurship.

"In order to do that, the Coalition should turn its attention to cutting business and personal tax rates and taking the axe to red tape.

"The lesson is clear: to encourage innovation and entrepreneurialism, the government should do as little as possible beyond cutting taxes and regulations."