Families are paying £3,000 more a year after Tory ‘stealth taxes’


The Government is on track ‘to be the biggest tax-increasing parliament’ since records began – MARIA UNGER/UK PARLIAMENT/AFP via Getty Images

Households are paying almost £3,000 more a year in tax on average than before the Conservative’s stealth tax raid, analysis has shown.

Since Boris Johnson came to power in 2019, the nation’s personal tax bill has soared from £267bn to £353bn – a rise of more than 32pc in four years. This includes receipts for income tax, National Insurance contributions, capital gains tax and inheritance tax.

Per family, this works out as an average tax bill of £12,533, up from £9,605 in 2019.

The £2,900 jump is in large part the result of the freeze on tax thresholds first imposed by Rishi Sunak in March 2021 while he was chancellor.

Choosing not to uprate the tax bands with inflation has left workers at the mercy of “fiscal drag”, a phenomenon where tax bills increase due to wage growth and inflation pushing individuals into higher tax bands.

Chris Etherington, of tax company RSM, which carried out the analysis based on figures published this week, said: “Many taxpayers may have felt they were worse off and paying more in tax, and these figures highlight the extent of that.”

The figures chime with earlier estimates from the Institute for Fiscal Studies, a think tank. It previously estimated that the average tax bill would leap by £3,500 in 2024, with taxes forecast to hit a record-breaking 37pc of national income.

The Government is on track “to be the biggest tax-increasing parliament” since comparable records began, the think tank said in its report.

Year on year, personal tax receipts are up 7pc at a time when families are also dealing with higher energy bills and surging mortgage payments.

The Prime Minister is under pressure to cut taxes in the March Budget ahead of a general election later this year.

The Government slashed National Insurance in the Autumn Statement, saving the average worker earning £35,000 a year £450 from January.

However, calculations by wealth manager Quilter show that some workers will be just £2.68 better off due to the tax giveaway than they would have been if thresholds had not been frozen.

Borrowing figures published on Tuesday revealed that Chancellor Jeremy Hunt has an extra £5bn of fiscal headroom that could allow him to cut income tax, National Insurance or inheritance tax.

At the same time, official statistics showed that the Treasury raked in £5.7bn in inheritance tax in the nine months from April to December 2023 – £400m more than in the same period a year earlier. The £325,000 threshold beneath which no inheritance tax is due has been frozen since 2009.

The higher rate income tax threshold is also unchanged at £50,270, while the additional rate threshold reduced to £125,140 last year. It means 7.8 million workers will be paying the 40pc or 45pc rate by 2027–28, according to the IFS.


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