Stealth tax hikes for over a MILLION Britons as Jeremy Hunt targets middle earners
Income tax thresholds have been frozen until 2027-28 in a bid to help pay off government debts
Nearly 1.5 million Britons will move into higher income tax bands over the next five years due to Chancellor Jeremy hunt's stealth tax, according to official forecasts.
As many as 1,130,000 people will pay a higher tax rate at 40 per cent, and an extra 301,000 Britons will be pushed into the 45 per cent additional rate tax band by 2027-28, according to a Freedom of Information request by wealth manager Quilter.
Income tax thresholds have been frozen until 2027-28 in a bid to help pay off government debts.
Workers earning over £50,140 will face the 40 per cent tax. The 45 per cent rate focuses on workers earning more than £150,000 but this will drop to £125,140 in April following the Chancellor’s plans.
The threshold for income tax usually increases with inflation – with a large rise predicted for 2023.
The freezing of tax bands helped raise money for the exchequer as inflation forces wages to rise. As a result more workers are pushed into higher tax brackets.
Hunt said last autumn: “Right now we are helping millions of families with the cost of living, but we must also ensure that our level of debt is fair for future generations.
“We have already taken some tough decisions to get debt falling, and it is vital that we stick to this plan so we can halve inflation this year and get growth going again – creating better paid jobs across the country.”
Government borrowing reached £27.4billion last month, jumping by £16.7billion against the same month a year earlier due to £7billion in costs from energy support schemes and soaring interest payments on debt, according to official figures.
The Office for National Statistics (ONS) said the reading represented the highest monthly figure for December borrowing since records began in 1993.
It said the Government spent an estimated £5billion on its energy price guarantee support scheme for households and businesses last month, with a further £1.9billion paid out for energy support payments.
Interest payments on government debt jumped to £17.3billion in December – the highest December on record – as a result of sky-high inflation.
Britain’s benefits dependency has reached an all-time high, with a study finding more than half of households get more from the Government than they pay in tax.
Civitas analysis of Office of National Statistics (ONS) data from 2020/21 showed a record 54.2 per cent of individuals – or 36 million people – now live in households which received more in benefits – including non-cash ones such as NHS and education services – than they contributed in taxes.
Civitas’s analysis showed 83 per cent of all income tax is paid by just 40 per cent of British adults.
It also found the bottom 40 per cent of the income scale – some 27 million people – receive an average of £23,000 per year in cash benefits and ‘benefits in kind’.
It comes after the Chancellor confirmed in November that disability and working age benefits would be increased in line with inflation.
Such benefits will rise by 10.1 per cent from April in line with the rate of inflation in September, at a cost of £11billion, Jeremy Hunt said.
He added he is concerned about a “sharp increase in economically inactive working age adults” since the start of the pandemic, announcing a review into the issues holding people back from work.
More than 600,000 people on universal credit will be asked to meet with a work coach “so that they can get the support they need to increase their hours”, he said.
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