Prime Minister Rishi Sunak is reportedly considering extending the current freeze on income tax thresholds and allowances until 2027-28. A two-year extension, currently in place until 2025-26, would generate an extra £4bn to £5bn in tax revenues for the Treasury, according to the Institute for Fiscal Studies think tank.
The Centre for Economics and Business Research, another think tank, said 2.2 million additional workers would be moved into higher tax bands as a result.
It would also mean significantly higher tax bills for workers. Financial advice firm NFU Mutual said freezing the personal allowance and higher-rate threshold until 2028 would add £14,990 to the income tax bill of a worker on a £60,000 salary over the next five years.
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