Across England, Wales and Northern Ireland, Income Tax thresholds have remained the same since 2021 and are not looking likely to change before 2031.

While this makes things simple for remembering what they are and advising clients accordingly, inflation and rising wages are increasing the impact of fiscal drag.

More taxpayers are crossing the Higher rate threshold than ever before, so accountants need to be able to absorb the expanding client base or risk witnessing a mass outbreak of tax non-compliance.

Are more Higher rate taxpayers good for accountants?

Almost two million more taxpayers are on track to cross the Higher rate threshold in the 2026/27 tax year compared to the 2023/24 tax year.

This means that an estimated 7.7 million taxpayers are expected to earn between £50,271 and £125,140 and could signal a significant increase in work for accountants.

Theoretically, the number of people who are now subject to the Higher rate of Income Tax is a win for the accounting industry, as it is likely that a growing number of people will be requiring the support of an accountant.

However, the reality is that many of the taxpayers crossing the threshold will not have the financial literacy that may have characterised previous cohorts.

The rise in the National Living Wage (NLW) may have pushed up rates of pay within companies in order to maintain the proportionality of compensation based on qualifications and experience.

Whereas a person would need to earn nearly three times the NLW in 2021 to be a Higher rate taxpayer, they now only need to earn double the amount.

Despite the rise in people needing to handle more complex financial matters, research indicates that financial literacy in the UK is in decline.

More work for accountants may really mean more work if they take on the influx of new clients pushed into higher tax brackets.

How can accountants support more Higher rate taxpayers?

Managing tax obligations is only going to be a small part of working with this growing cohort of individuals.

It is likely that more people will be frustrated that they are subject to a heightened tax exposure, even as their work has not changed substantially.For these individuals, clearing away the tedious tasks as effectively as possible will be vital if an accounting team is to support them.

They will likely be open to finding new ways to manage their money, but may need additional time to understand the new world of restructuring assets to be tax efficient.

While the work may be more rewarding for your team, it will only be possible if they have the time to commit to it.

Glasscubes is designed to break through bottlenecks and ensure you can deliver high-value support for clients.

As your new clients may be unaware of different obligations, they are likely to need additional prompting to provide you with the information required to get started.

Our automated reminders can take care of this, ensuring your team are not distracted with continually chasing vital documents.

The secure email link provides a safe space for clients to share confidential documents without the hassle of a dedicated account.

Your team have access to real-time reporting that lets you monitor the progress of each client’s work so that you can keep up with what needs doing and when.

Being this proactive may help reassure new clients that accountants are worth engaging with, especially as the time you save with tedious tasks can be translated into giving them the insights they need to feel financially confident.

The client base of accountants is likely to keep growing as frozen thresholds and rising costs make more people engage with their financial position.

Accountants need to be able to offer meaningful support and having the right technological solution can be the key to making this happen.

If you are ready to embrace the new cohort of clients, book a demo today!