New research reveals that Jeremy Hunt will rake in thousands of pounds extra from all average workers over the next five years without making a single change to the tax system.
The Chancellor is planning a string of tax increases to be unveiled in his Autumn Statement on November 17, but just as important as what he intends to change is what he plans to leave the same. Reports suggest he will leave income tax thresholds where they are, despite skyrocketing inflation.
The freeze to income tax thresholds up to and including the 2025/2026 tax year was announced during the Budget in March 2021, by Rishi Sunak when he was chancellor.
Over the past 20 years, average wage growth per year has been close to 3 per cent per year. Nevertheless, with inflation now in the double digits it’s likely to be higher over the next few years.
With a 3 per cent wage increase, someone making £35,000 faces having paid an extra £1,177 in income tax by 2028, but if wages rise by 5 per cent per year the figure will be more than £2,000 by 2028.
Shaun Moore, tax and financial planning expert at Quilter, which carried out the analysis, said that the calculations show the power of fiscal drag and how freezing income tax thresholds was a form of stealth tax.
He said that ultimately, if thresholds stay frozen for a number of years, then you would end up paying vastly more tax, and thresholds were meant to remain frozen until 2026 but with the cost of living crisis weighing heavy on government spending, this could be extended.
The Chancellor is set to meet colleagues this week as they attempt to hammer out a package ahead of the crucial Autumn Statement on November 17.
Jeremy Hunt warned business leaders that there was no way of sugarcoating the fact that personal and business taxes were going to increase.
According to Politico, he told an event at Claridge’s hotel in London that it was going to be a tough pill for everyone to swallow.
Rishi Sunak told Cabinet that difficult decisions were coming, but highlighted the NHS would be prioritised for funding while making clear that in return the health service would need to accept reform.
Nonetheless, that means other departments are facing even deeper curbs, as spiking inflation erodes the value of their budgets, and Defence Secretary Ben Wallace told a House of Lords committee that he will suggest to the Chancellor that the strength of the army could remain at 76,000 rather than dropping to 73,000 as intended.
It appears that Rishi Sunak doesn’t want to remain Prime Minister for long, and how will he restore the Conservative Party after the next election I wonder?
So, once again the ordinary working people will be made to pay for the incompetence, blunders, failures, downright lies, arrogance and inflexibility of Rishi Sunak, Hancock and Johnson, and they will never admit their numerous blunders, and will never apologise, but will just penalise the law-abiding, hard-working, lower and middle classes, while protecting the pretentious, wealthy tax avoiders, and select few.
It’s the politicians that have screwed the economy, they’ve been making money hand over fist and yet the masses get to pay for it. Politicians are the problem, not the people.
Stop handing it out to those that don’t even have a right to be in this country, let alone experience any of its privileges. They should also cut the MP and civil servants on high income because cuts never come from within.
THE MONTHLY MOSQUITO 