Sage Sunak accused of imposing বিল 21 billion ‘stealth tax’ on UK workers

Sage Sunak has been accused of using a “stealth tax” on income that would more than double his budget, as living expenses have risen at the fastest rate in three decades.

Ahead of the Chancellor’s spring statement in the House of Commons next week, the Institute for Fiscal Studies said rising inflation could mean the Treasury could raise 13 13 billion more than expected by freezing income tax personal allowances and higher rate thresholds.

It said the four-year refrigerator announced by Sunak in last year’s spring budget was expected to bring £ 8 billion to the exchequer by dragging millions of workers to pay more taxes.

However, the Treasury estimate was based on a much lower-than-expected inflation rate in the now-defunct cost-of-living emergency in Britain. With a dramatic increase in energy bills this April and Russia’s aggression in Ukraine pushing gas prices to record levels, the IFS said freezing the income tax threshold would now bring £ 21bn to the public purse.

Paul Johnson, director of the IFS, said: “With so much inflation forecasting, it looks like a huge tax increase of bn 21bn – two and a half times the target.”

Under the plan, announced last spring, personal allowances – the level at which workers begin to pay income tax – will be frozen at শুরু 12,570 from the beginning of next month until 2026.

The high-rate income tax threshold – when workers start paying 40% instead of the standard 20% rate – will be frozen at £ 50,270 over the same period.

The plan was controversial, with the low-tax Conservatives uncomfortable with the Chancellor lifting the tax burden at the most sustainable rate since the end of World War II. However, Sunak has defended the measures as a fair and responsible way to deal with record levels of government debt during the coronavirus epidemic.

During the spring budget, the Office for Budget Responsibility – Treasury Tax and Expenditure Monitoring – estimated that the plan would bring 1.3 million more people to pay income tax and another 1 million to pay higher rates.

Although wages are rising – which means more people will pay higher rates – wages are failing to keep pace with rising inflation. Official figures show that inflation-adjusted wages, excluding bonuses, fell at the fastest rate in eight years in January.

Experts now say significantly more people will face higher tax bills. Sam Robinson, a senior researcher at Bright Blue, an independent think tank on liberal conservatism, said: Provides targeted assistance to those most in need during off-living crises. “

The chancellor is also under pressure to scrap his proclamation-busting increase in national insurance contributions announced last autumn, which is set to take effect next month and is expected to bring in around 12 12 billion. Labor and a number of prominent conservative backbenchers called on Sunak to change course in a spring statement to help increase British living costs.

Sarah Coles, a senior personal finance analyst at Hargreaves Lansdowne, said: “We are facing a terrible stealth tax on our income, which will cost us much more than we expected.

“Freezing income tax thresholds during wage inflation will have far more impact than anyone initially thought and will hit us just as much as we initially thought national insurance would increase.”

A Treasury spokesman said: “Our approach ensures that higher earners will contribute more – while the vast majority of taxpayers will still pay the basic tax rate by 2026.”

“We acknowledge the pressures we are facing on the cost of living and are providing approximately 21 21 billion in assistance this fiscal year and beyond.”

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