Here are 12 strategies to reduce the tax burden for the top 10% of earners, who pay over half of all taxes

A growing number of people are being forced into higher and additional rate tax brackets by frozen tax thresholds

You'll pay more?

The top 25 percent of taxpayers will pay more than three quarters (76 percent) of all income taxes this year. Earning 47,400 is all it takes to be in that group.

A wealth firm, Hargreaves Lansdown, analyzed government data and found that if your income is 71,600, you are in the top 10 percent, paying more than half (59 percent) of all income tax.

Many of the top 25% of earners will have been forced to pay higher rate or additional rate tax over the past few years due to the frozen tax thresholds, while others have fallen over the precipice of earning £100,000.

Higher earners will always be subject to higher taxes, according to Sarah Coles, head of personal finance at Hargreaves Lansdown. They will bear the majority of the load, have the widest shoulders, and make more money.

But because tax thresholds have been frozen, the amount of taxes they must pay has increased dramatically, affecting many people who do not think of themselves as extremely wealthy.

Because thresholds were frozen in 2021 - 2022, there are an estimated 7.08 million higher rate taxpayers in the 2025 - 2026 tax year, an increase of 2.65 million.

In addition, an estimated 1.2 million more rate-payers are in the system, which is a 710,000 increase since 2021 - 2022, more than doubling.

The 60 percent tax trap is the term used to describe the disproportionately high taxation of the portion of higher earners' income that falls between £100,000 and £125,140. You forfeit one of your personal allowances for every two times your income exceeds £100,000. You have already lost everything by the time you make £125,140, so you essentially pay 60% tax on that portion of your pay.

At 100,000, you no longer receive government funding for childcare, making it even more difficult if you have kids. After exceeding 125,140, you are required to pay 45% of the excess.

Investment and savings taxes.

Higher earners also pay the highest taxes on their investments and savings when they cross income tax brackets.

A different post examines the top savings accounts.

Taxpayers with additional rates pay over half of the total savings tax (55 percent). 30% of it is paid by taxpayers with higher rates.

Taxpayers with basic rates can keep £1,000 of their savings tax-free, while those with higher rates pay £500. Additionally, those with additional rates pay taxes from the first penny of interest and pay income tax on the additional interest, so their rates are also higher.

In addition to paying higher dividends, higher earners also have to deal with the fact that the rate was raised in April 2022 and allowances were cut from 2,000 to 500 between April 2022 and April 2024.

Dividend taxes for higher rate taxpayers are 43 percent, while additional rate taxpayers pay 42 percent.

Higher earners pay more taxes because they typically have more savings and investments.

This year, higher rate taxpayers will pay over £8 billion in dividend taxes and £1.08 billion in savings taxes. Additional rate taxpayers will pay 7.8 billion in dividend taxes and 3.35 billion in savings taxes. They will each pay 85% of the total.

The tax-free allowance on that has been drastically reduced from 12,300 to 3,000, and the capital gains tax rate also increases when you start paying higher rate tax.

"All of this indicates that it's worthwhile for higher earners to learn about tax hacks," Coles stated.

Twelve lawful tax strategies for higher incomes.

1) If your employer allows it, salary sacrifice is the practice of setting aside a portion of your pay to be used for tax-free purposes, such as pensions. This will lower the amount of income that is subject to higher tax rates. The 100,000 cliff edge is one of the tax thresholds that it might lower you below. Check to see if there are any bonuses you can receive by using the scheme.

2) If there isn't a salary sacrifice plan, you can still contribute to your own lifelong pension fund and get tax breaks at your highest marginal income tax rate.

3) Under the carryover rules, you can use any unused annual pension allowance from the three prior tax years, provided that the total does not exceed your current income.

4) To minimize your tax liability if you are earning money from savings interest, use a cash ISA.

5) Make use of the ISA allowances for stocks and shares, which shield your investments from capital gains and dividend taxes.

6) You may wish to take quick action regarding your ISA benefits. Rumor has it that the cash ISA allowance may be reduced; this may not happen this tax year, but you might want to take action while you still have your options.

7) If you already have investments outside of an ISA, you can use this year's allowance to transfer them inside by using the Bed and ISA process, which involves selling holdings in your general account and then repurchasing those same holdings inside your ISA.

8) To maximize this year's capital gains allowance, you should think about realizing up to £3,000 in gains if you have investments outside of an ISA and have already used your ISA allowance for this tax year.

9) Make a joint plan. People who are married or in a civil partnership, where your partner pays a lower tax rate, are able to transfer assets that generate income into their name. The remainder is taxed at their marginal rate instead of yours, allowing you to both benefit from your ISAs and tax allowances.

10) Remember your children. All interest, dividends, and capital gains are tax-free when you save or invest £9,000 for any eligible child in a Junior ISA during the current tax year.

11) Examine enterprise investment plans and venture capital trusts. Due to their high risk, these aren't suitable for everyone and should only be a small portion of a larger, more varied portfolio. You can, however, receive a 30% income tax refund on your investment through these programs, which will lower your total tax liability.

12) You should think about deferring income if your future earnings will be lower. If you anticipate paying a lower tax rate in the future, think about taking your income then instead of now. As an alternative to easy access that pays more frequently, you can use fixed term savings that pay interest annually. This is usually a good idea right before retirement.