Millions of UK workers could find themselves paying more income tax in the coming years \u2014 even if the Government does not officially raise the headline tax rates.<\/p>\n
The reason is a policy known as fiscal drag. It happens when tax thresholds stay frozen while wages rise. On paper, workers may appear to be earning more. In reality, many are simply being pulled into higher tax bands while the cost of living continues to bite.<\/p>\n
The personal allowance remains fixed at \u00a312,570, while the higher-rate threshold is still set at \u00a350,270. The additional-rate threshold was cut from \u00a3150,000 to \u00a3125,140 in 2023 and has remained there.<\/p>\n
That means ordinary pay rises can quietly push people into paying more tax \u2014 without them necessarily feeling any better off.<\/p>\n
The policy was first introduced under the previous Conservative government, but Chancellor Rachel Reeves has extended the freeze until 2031. According to official forecasts, income tax receipts are expected to rise sharply in the years ahead, with millions more workers being pulled into higher bands.<\/p>\n
For many households, this creates a frustrating situation: wages may rise, but take-home pay does not keep pace. What looks like a pay increase can quickly be swallowed by higher taxes, inflation, rent, mortgage payments and everyday bills.<\/p>\n
By 2030\u201331, projections suggest that millions more people could be paying higher rates of tax compared with previous decades. The number of higher-rate taxpayers has already grown significantly since the freeze began.<\/p>\n
Critics argue that this is a stealth tax \u2014 because the Government does not need to announce a direct income tax rise for people to end up paying more.<\/p>\n
For ordinary Britons, the key question is simple: if wages are rising but living standards are not, who is really benefiting?<\/p>\n","protected":false},"excerpt":{"rendered":"
Millions of UK workers could find themselves paying more income tax in the coming years \u2014 even if the Government does not officially raise the headline tax rates. The reason…<\/p>\n","protected":false},"author":2,"featured_media":1520,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[26],"tags":[],"class_list":["post-1519","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news"],"_links":{"self":[{"href":"https:\/\/tempest-portal.com\/index.php?rest_route=\/wp\/v2\/posts\/1519","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/tempest-portal.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/tempest-portal.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/tempest-portal.com\/index.php?rest_route=\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/tempest-portal.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=1519"}],"version-history":[{"count":1,"href":"https:\/\/tempest-portal.com\/index.php?rest_route=\/wp\/v2\/posts\/1519\/revisions"}],"predecessor-version":[{"id":1521,"href":"https:\/\/tempest-portal.com\/index.php?rest_route=\/wp\/v2\/posts\/1519\/revisions\/1521"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/tempest-portal.com\/index.php?rest_route=\/wp\/v2\/media\/1520"}],"wp:attachment":[{"href":"https:\/\/tempest-portal.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1519"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/tempest-portal.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1519"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/tempest-portal.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1519"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}