 This is called 'fiscal drag' - because more people are dragged into paying higher tax as wages and prices rise. IFS Senior Economist Stuart Adam told the Mirror: 'Whether people attribute it to government-imposed tax rises or not, their incomes will be lower and their living standards will be lower.' Mr Adam warned the £35bn estimate depends on inflation returning to 2% in the mid-2020s. If it does not, the stealth tax raid would be even higher. When the four-year freeze on thresholds was announced last year, it was thought it would raise £8bn a year by 2026. But soaring inflation - which means wages overtake the limit more quickly - pushed that estimate up to £18bn and then £30bn. A four-year freeze on tax thresholds will raise £30bn a year by 2026 - up from initial estimates of £8bn ( Getty Images/iStockphoto) The IFS's £35bn figure includes all freezes on income tax thresholds, including the £50,270 level where the 40p tax rate kicks in. It also includes the freeze on the 'upper earnings limit' in Nationa){kind=link}
Experts the IFS said extending a freeze on Income Tax and National Insurance thresholds to 2028 would be a huge windfall – and leave families with ‘lower living standards’
Rishi Sunak is poised to unveil stealth tax rises next week which could raid £35billion from Brits every year.
Experts issued the warning as the PM considers extending a freeze on tax thresholds in Thursday’s Autumn Statement.
The £12,570 Income Tax and National Insurance thresholds are already being frozen for four years to April 2026.
Now the Chancellor is looking at extending this to April 2028, it’s understood.