UK set for biggest tax rise in at least 50 years

The UK is on course to see its biggest tax rise in at least 50 years as a result of the freeze on personal thresholds and soaring inflation, according to analysis from the Resolution Foundation.

The UK is on course to see its biggest tax rise in at least 50 years as a result of the freeze on personal thresholds and soaring inflation, according to analysis from the Resolution Foundation.

The think-tank said taxpayers are set to pay over £40 billion a year by 2028, up from a forecast of £30 billion at the time of the March Budget.

A four-year freeze in personal tax thresholds – the Personal Tax Allowance and Higher Rate Thresholds for Income Tax – was first announced in Budget 2021. At the time, it was forecast to raise £8 billion a year once fully rolled out in 2025/26.

In Autumn Statement 2022, this was supplemented by a two-year extension of the policy through to 2027/28, and the addition of an employer National Insurance threshold freeze, which raised £6 billion.

The more recent inflation shock has significantly increased the size of this tax rise.

Adam Corlett, Principal Economist at the Resolution Foundation, said:

'Abandoning the usual uprating of tax thresholds is a tried and tested way for governments of all stripes to raise revenue in a stealthy way.

'But it is the far bigger than anticipated scale of the government's £40 billion stealth tax rise that stands out.

'The reality of the largest, and ongoing, tax rise on incomes in at least 50 years is why any talk of pre-election tax cuts will inevitably be seen in the wider context of some far bigger tax rises.'

Internet links: Resolution Foundation

Home | Contact us | Site map | Accessibility | Disclaimer | Privacy | Help |

© 2024 Michael Harwood & Co. Chartered Accountants. All rights reserved.

“Michael Harwood & Co” is a trading name of Greville House Services Limited, a Limited Company registered in England & Wales (company number 04119622). Registered office address:

Michael Harwood & Co. Chartered Accountants, Greville House, 10 Jury Street, Warwick, Warwickshire CV34 4EW

A list of directors is available for inspection at the registered office. Any reference to a ‘partner’ in relation to Michael Harwood & Co means a Director of Greville House Services Limited.
Michael Harwood & Co is registered to carry on audit work in the UK by the Institute of Chartered Accountants in England and Wales’. Details about our audit registration can be viewed at www.auditregister.org.uk under our firm reference number C003802656.


We use cookies on this website, you can find more information about cookies here.