Note: Income ranges assume the individual receives the standard personal allowance. For people with non-standard allowances – receiving the blind person’s allowance, for example, or having their personal allowance reduced by HMRC to make up for underpaying tax in the previous year – the width of the basic-rate band is unchanged, so the lower bound of the higher-rate income range will be different from that shown in the table. Numbers of taxpayers include Scottish taxpayers, who are classified as higher-rate taxpayers if they have total income above the UK higher-rate threshold or if they have non-savings, non-dividend income above the Scottish higher-rate threshold, and as basic-rate taxpayers otherwise. The number of adults classified as having income below the personal allowance is calculated as the difference between the total number of taxpayers and the total adult (i.e. aged 16+) population; the classification is not strictly accurate as the adult population and the taxpayer population can differ for reasons other than having income below the level of the personal allowance.
Source: Number of taxpayers from https://www.gov.uk/government/statistics/number-of-individual-income-taxpayers-by-marginal-rate-gender-and-age (June 2023 edition). Total adult population from ONS 2020-based principal national population projections, https://www.ons.gov.uk/peoplepopulationandcommunity/populationandmigration/populationprojections/datasets/tablea11principalprojectionuksummary (12 January 2022 edition). Revenue shares from https://www.gov.uk/government/statistics/income-tax-liabilities-by-taxpayers-marginal-rate (June 2023 edition).
Lower headline tax rates on self-employment than on employment aren’t justified by differences in benefits or employment rights, and are poorly targeted at improving investment incentives.