Rachel Reeves accused of Middle England tax raid as she scrambles to avoid disaster

The Chancellor is going after middle-class Britons as she scrambles to avoid financial disaster, campaigners have claimed. Rachel Reeves has been accused of "driving away" high earners, with the result that "Middle England" pays a greater share of the tax burden.

A new analysis found the share of income tax expected to be paid by the top 1% has slumped from nearly 31% in 2021-22 to just under 27% in 2025-26. The Taxpayers' Alliance (TPA) says nearly three million more people will have been forced to pay the basic rate of income tax in 2025-26 than in 2021-22. The number paying higher rate income tax has gone up by more than 2.6million.

It claims Yorkshire and the Humber has seen a 20% increase in the total number of people paying income tax - even though the campaign group says it has the "third-lowest average earnings in the UK".

The findings come in the same week the National Institute of Economic and Social Research (NIESR) warned the Government will need to find more than £50billion in tax rises and spending cuts by 2029-30 if it wants to avoid breaking a key fiscal rule and keep in place an emergency cushion against shocks. NIESR has recommended a "moderate but sustained increase in taxes" to build a bigger "buffer" to protect the economy.

The TPA says the share of tax receipts paid by the bottom 50% has climbed to just under 10%.

John O'Connell, chief executive of the TPA, said: "This is the sad but inevitable result of successive governments' assortment of anti-affluence tax policies, which penalise aspiration and success. The UK is now trapped in a doom loop, with the Chancellor desperately scrabbling around for more cash to fill the fiscal black hole and increasingly finding her only option is to come after the middle classes.

"Rachel Reeves needs to now show some humility and reverse the policies that have done so much to drive away high earners."

The TPA is pressing for the Government to U-turn on a host of measures it claims target the well-off, including VAT on private schools, inheritance tax changes and the abolition of non-dom status. It also wants the Labour Government to "decisively and unequivocally" rule out wealth taxes.

A Treasury spokesperson said: "This government inherited the previous government's policy of frozen tax thresholds. At the Budget and the Spring Statement, the Chancellor announced that we would not extend that freeze.

"We are also protecting payslips for working people by keeping our promise to not raise the basic, higher or additional rates of Income Tax, employee National Insurance or VAT. That's the Plan for Change - protecting people's incomes and putting money into people's pockets."