Stealth tax rise to cost average worker £250 a year

Workers are set to be hit with an added tax bill of £250 a year under plans being weighed up by Rachel Reeves to extend the stealth income tax rise introduced by the Conservatives.

The thresholds at which earners start to pay the 20p basic rate, 40p higher rate and 45p additional rate of income tax have been frozen since 2021 – rather than rising in line with inflation.

That means that as workers’ incomes have increased in nominal terms each year, they end up paying a higher percentage of their earnings in tax. New Feature

In Short

Quick Stories. Same trusted journalism.

The Chancellor previously promised to end the freeze in 2028, from which time the thresholds will again go up each year in line with inflation. But she has now abandoned that pledge and economists believe it is