“Enough to fill Wembley and the 02” - 110,000 Londoners to be dragged into higher rate of tax

New figures from the House of Commons Library, commissioned by the Liberal Democrats, reveal that enough Londoners to fill Wembley Stadium and the 02 Arena will be dragged into paying the 40p higher rate of income tax in 2026-27 as a result of the Labour Government’s decision to keep tax thresholds frozen this year.

Luke Taylor MP, the party’s London Spokesperson, has highlighted that among the 110,000 affected Londoners are doctors, teachers and police officers, some of whom now face a £2,660 tax hit due to income tax bands staying frozen since 2022. 

The 'stealth tax penalty' in London is greater than anywhere else in the country, which the MP has said represents Londoners being “penalised” for receiving London-weighted salaries to cope with “out-of-control” housing costs.

Newly qualified nurses, classroom teachers, and police constables, earning between £32,073 and £34,069 are set to pay an additional £675 this year in combined income tax and National Insurance, due to the personal allowance staying frozen last April. Senior police constables making £52,014 face a tax hit of £570, while lead teaching practitioners and senior nurses, who can earn £81,861 and £79,504 respectively, are looking at a whopping £2,660 in extra tax this year.

The figures, commissioned from the House of Commons Library by the Liberal Democrats, follow the party announcing it would raise the personal allowance to £15,000 and the 40p threshold to £56,000 over five years, funded by the proceeds of joining the EU single market. The move would take 760,000 workers out of paying the higher rate, and 2.5 million out of income tax altogether, putting £680 back into the pockets of more than 30 million taxpayers.

Liberal Democrat London Spokesperson Luke Taylor MP said:

“For 110,000 Londoners to be dragged into the higher rate of income tax is clearly unacceptable. The bracket was never designed to capture these doctors, nurses, teachers and other key workers who keep our city going.

“It would mean enough people to fill Wembley Stadium and the 02 Arena facing a personal tax hike just as energy bills rise and inflation soars.

“London-weighting for salaries is designed to reflect our out-of-control housing costs, but those salaries are already struggling to keep up, and now the hardworking people on them are being penalised for receiving them.

“The ground is moving beneath the feet of hardworking people in our city. The Chancellor knows that Londoners are feeling the costs of Brexit directly, and should listen to our Lib Dem plans to raise the threshold for the upper rate to £56,000, paid for by doing the obvious thing Londoners have always supported - rejoining the EU Single Market”.