Income tax: Healey’s budget leaves thresholds frozen again. How much more will you pay?
Source: The Guardian ·
Tax policy means freezes reduce take-home pay as earnings rise in line with inflationIncome tax thresholds are set to remain frozen after John Healey’s first budget as chancellor.One of the biggest tax rises in recent years has happened without a change in the rates at which people are taxed on their incomes. Instead it has come from successive government decisions to keep the thresholds…
From the source
Income tax thresholds are set to remain frozen after John Healey’s first budget as chancellor. One of the biggest tax rises in recent years has happened without a change in the rates at which people are taxed on their incomes. Instead it has come from successive government decisions to keep the thresholds associated with the tax at the same level each year, regardless of inflation. Freezing tax thresholds results in “fiscal drag” – a phenomenon where people are dragged into higher tax bands when they get pay rises. Until 2021, the UK income tax thresholds were typically increased each year in line with inflation. When the then chancellor, Rishi Sunak, delivered his budget that year he announced that thresholds would be frozen from April 2022 until 2026. The Conservative government extended that freeze until 2028, and last year the then Labour chancellor, Rachel Reeves, announced it would continue until 2030. Healey did not mention the freeze in his budget, but the documents show it…
BestAIBroker analysis
- Finance-aware sentiment: slightly negative (-0.30 on a -1 to +1 scale).
- Event classification: OTHER.
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- Symbols referenced: UK.