Biggest tax freeze in history

Posted on 29 May 2024
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Freeze will hike tax burden, whoever is elected

The Times’ David Smith says that even if the election campaign sees pledges that rule out tax increases, the tax burden will still rise. The Office for Budget Responsibility (OBR) says taxes as a proportion of GDP are on course to rise from 36.1% in 2023/24 to 37.1% in 2028/29, the highest since 1948. He highlights the impact of the freeze on income tax allowances and thresholds that came into force in 2022 and is due to last until April 2028. The OBR estimates that by the end of the freeze, taxes will be £33.6bn a year higher than would otherwise be the case. Mr Smith says the freeze is “the biggest stealth tax increase in history,” pulling 3.7m more people into the income tax system, creating 2.7m more higher-rate taxpayers and putting 600,000 more people into the top 45% rate of tax.

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