![Pinterest](https://pinterest.com/pin/create/button/?url=https://uknews.evprotec.com/millions-to-be-hit-by-2500-pay-cut-autumn-statement-tax-change-goes-ahead/&media=https://uknews.evprotec.com/wp-content/uploads/2022/11/416a4982-JS759062182.jpg&description=MILLIONS of people could be £2,500 worse off under government plans set to be unveiled in the autumn statement. Chancellor Jeremy Hunt is considering extending a freeze on income tax thresholds until 2028 - dragging millions more into a higher rate of tax. Millions could be hit with a pay cut under new plans in the Autumn Statement That is because inflation and rising wages will mean more workers hit the thresholds, even though they are no better off in real terms. Thresholds would usually be tweaked to take both of those things into account. The freeze was meant to come to an end in 2026. By extending it, Brits earning the average UK salary of £33,000, could end up paying £2,557 more in tax overall over the next six years, according to AJ Bell. The basic rate of income tax currently kicks in on earnings over £12,571, and the higher rate of 40 per cent at £50,271. This sneaky stealth tax is expected to bring in £30billion a year by 2026. A stealth tax is a form a tax collected in a way that isn't obvious - and you might not even notice it. While the government doesn't change the headline rate, you end up paying more money. How will the change affect me? How much your tax bill could change. Figures from AJ Bell Put simply, inflation and pay increases will mean more people being dragged into higher bands. Laura Suter, head of personal finance at AJ Bell, said the move means that rather than rising with inflation, the point at which you start paying tax - and the point when the higher rate kicks in - will be frozen. The UK's rate of inflation is currently at a 41-year high of 11.1%, while average total pay, including bonuses, increased by 6% from July to September. This essentially means that with wages steadily climbing, it means millions more people will become higher rate taxpayers and see a portion of their pay disappear. Laura said: 'The squeezed middle will once again be hit the hardest if the government's plans to extend the tax threshold freeze come to pass. "T){kind=link}
MILLIONS of people could be £2,500 worse off under government plans set to be unveiled in the autumn statement.
Chancellor Jeremy Hunt is considering extending a freeze on income tax thresholds until 2028 – dragging millions more into a higher rate of tax.
That is because inflation and rising wages will mean more workers hit the thresholds, even though they are no better off in real terms.
Thresholds would usually be tweaked to take both of those things into account.
The freeze was meant to come to an end in 2026.