Taxpayer Tuesday Discount Card

More and more people in the UK are being pulled into the 40% rate tax band as their incomes tip over £50k per year and tax bands remain frozen despite increasing inflation.

This can lead to resentment, especially among groups such as the High Earners Not Rich Yet (HENRYs).

Finding ways to help soften that pill could have a disproportionate impact on the perception of taxation and people’s desire to be higher-rate taxpayers.

This idea builds on the ‘eat out to help out’ programme during Covid but focuses purely on higher-rate taxpayers.

The aim is to make paying a higher rate of tax a conspicuous act, which everyone wants to be seen doing to demonstrate their wealth and not be left out of their friendship crowd.

All higher-rate taxpayers would receive a physical card that they could scan to get a ‘Taxpayer Tuesday’ discount on the third Tuesday of every month, entitling them to 50% off any spend up to £50.

Although the savings are very small, people still like to have them to feel they are getting some recognition for the tax they pay, and the visibility of the card makes it a status symbol as a display of wealth, creating FOMO for anyone without a card. There could even be a Gold card for the highest-rate taxpayers, entitling them to double the discount.

The scheme would only cost up to £300 per higher rate taxpayer per year, a minimal sum, but would help to transform the perception of being a higher rate taxpayer, reducing resentment among the population and helping to increase compliance.

And the infrastructure to deliver the project is already in place from Covid, but the individual card for higher-rate taxpayers would help to reduce fraud, as each person would control what they spent.