The Institute for Fiscal Studies expects over 4 million taxpayers to pay higher rate tax in five years time, which is double what it was in 1997.

This tax year, approximately 1 in 9 people pay higher rate tax. One of the reasons for the increase is that our incomes are rising faster than the tax bands and allowances, which tend to go up with inflation.

Inheritance tax also hasn’t kept up with rising prices. The threshold for this tax will rise to around £263,000 next tax year, but had it kept up with rocketing house prices, it would now be around £400,000!

What’s more, the legal loophole used by many to reduce IHT bills is to be closed. If you have created a trust in order to leave your home to your children, but continue to live in your property, you could be hit with a yearly income tax bill.