Hunt's hidden tax raid forces families to pay hundreds of pounds more to Treasury

Chancellor Jeremy Hunt has extended the freeze on income tax thresholds until 2027. Photo: Jordan Pettitt/PA Wire

Jeremy Hunt's hidden tax raid According to RSM accountants, the average family pays £368 more to the Treasury this year.

The Treasury made £155bn in the first four months of 2023 sterling in tax revenue from individuals, more than £10 billion, or 7 per cent, more than in the same period in 2022.

The average worker's earnings have increased. by more than 8% over that period, according to the Office for National Statistics.

But inflation also rose sharply, so in real terms, the average worker's wage rose by only 0.5%.

That's a lot less than a 7% increase in personal tax payments, which include income tax, national insurance, capital gains and inheritance tax.

1807 Wage Prices

Chris Etherington, RSM's tax partner, said that this is due to the freezing of tax thresholds, which means that workers move into higher tax brackets as wages rise, even if their incomes are reduced due to inflation.

«With tax thresholds frozen, HMRC's latest statistics show that this is leading to an increase in personal tax bills for households hitting record highs since the start of the fiscal year,» he said.

«Averaging over a four-month period households are paying 57 percent more personal taxes this year than in the same period ten years ago. This year this equates to £5,486 per family, compared to £3,504 ten years earlier.”

The income tax threshold freeze was first announced by Rishi Sunak in March 2021, when he was Chancellor. He said the brackets would be frozen in monetary terms until 2025-2026.

Chancellor Jeremy Hunt then extended that period to 2027-28.

OBR estimates that along with the freeze national insurance thresholds by 2027-2028, the government's policy of so-called fiscal braking will generate an additional £29.3 billion in tax revenue per year.

2308 Tax revenues are skyrocketing

John O'Connell, executive director of the Taxpayers Alliance, called for an end to the tax freeze.

«The growing tax burden is exacerbating the suffering of families struggling with a cost-of-living crisis,» he said. said.

«Frozen thresholds and persistent inflation are pulling households into higher ranges, costing them hundreds of pounds on top of already exorbitant taxes.»

«The Treasury needs to give taxpayers a breather and the economy will gain momentum by lifting the frozen thresholds.»

A Treasury spokesman said: «Cutting inflation is the most effective tax cut we can implement right now, so we're sticking to our plan to halve inflation.» instead of making things worse by borrowing money to finance tax cuts.

“Since 2010, we have removed 3 million people in total from paying taxes by raising personal thresholds, and the Chancellor has said he wants to reduce the tax burden even more, but safe money should come first.”