Middle earners lose out significantly when it comes to tax

The personal allowance, which is the amount you can earn before income tax, is set to rise in the 2018/19 tax year by £350, from £11,500 to £11,850.

The basic rate threshold; the amount of earnings above the personal allowance that attracts income tax at 20%, will also rise by £1,000 to £34,500.

After studying ten years of inflation figures, we have seen that middle earners have lost out significantly when it comes to tax.

According to our calculations, had the tax free allowance risen in line with inflation, it would be £9,500 higher at £55,851.

It can be difficult to get your head around taxes, and how you can reduce your tax liability but there are some simple steps which can be taken to reduce the amount of tax you pay from your salary.

One of the most common ways to reduce your tax liability is by making pension contributions or undertaking some form of salary sacrifice. 

This presumes that you have the ability to make pension contributions. Our Rickmansworth based adviser, Sheetal Radia, talks to The Times and This is Money about our analysis.