Employees' Contributions and Income Tax
The question
To ask the Chancellor of the Exchequer, whether (a) her Department or (b) HMRC has undertaken (i) research and (ii) analysis on the potential impact of the level of the combined marginal rate of income tax and employee National Insurance contributions on incomes between £100,000 and £125,140 on work incentives, including the effect of student loan deductions.
Answered by Dan Tomlinson
The Government recognises that taxpayers earning between £100,000 and £125,140 face a higher marginal tax rate due to the tapering of the tax-free Personal Allowance, introduced in 2010-11.
A breakdown of income tax liabilities is published by HMRC, and the most recent update from June 2025 is available at: https://www.gov.uk/government/statistics/income-tax-liabilities-statistics-tax-year-2022-to-2023-to-tax-year-2025-to-2026
The Plan 2 Student Loan Scheme was introduced in 2012 under the Conservative and Liberal Democrat Coalition Government.
We will continue to keep the terms of the system under review to ensure the system protects taxpayers and students now and in the future.
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