Summary
The UK government's decision to freeze income tax thresholds means people may pay more tax as their salaries rise. This policy, extended until 2031, affects employees in England, Wales, and Northern Ireland. The freeze is set to generate significant revenue by 2030-31.
Key Facts
- Income tax thresholds in the UK are frozen until 2031.
- Frozen thresholds mean people could pay more tax on higher earnings.
- The current personal allowance is £12,570.
- Basic tax rate is 20% on earnings between £12,571 and £50,270.
- Higher tax rate is 40% on earnings between £50,271 and £125,140.
- Earnings above £125,140 are taxed at 45%.
- The freeze is expected to generate £56 billion in revenue by 2030-31.
- Approximately 5.2 million more people will pay the basic tax rate due to this freeze.
