Research carried out by think tank the Resolution Foundation has suggested that
the size of the UK's six-year 'stealth tax' threshold freeze has nearly trebled
to £25 billion.
The figure is significantly higher than the previous forecast of £9 billion
announced during the 2021 Budget.
A small number of tax thresholds have been frozen since 2021/22 and are set to
remain frozen until April 2028. The think tank found that next year's threshold
freeze will raise £12 billion a year by the time of the final freeze in 2027/28.
Adam Corlett, Principal Economist at the Resolution Foundation, said:
'High inflation has pushed up the projected revenue take from the
government's personal tax threshold freeze to £25 billion a year – almost
triple the amount forecast when the freeze was introduced. But higher-income
households will be the ones most affected by next year's major tax
rises.
'High inflation also means benefits are being uprated by 10.1 in April, which
will boost low-income households' finances, although benefits are only set
to fully catch up with price rises after April 2024's uprating.'
Internet link: Resolution Foundation website