The IFS has warned that households will lose more from “opaque and stealthy” freezes over the next three years than they will gain from tax cuts.
The Institute for Fiscal Studies has warned that households will lose more from “opaque and stealthy” freezes over the next three years than they will gain from tax cuts.The mini-budget’s high-profile cuts include the reductions in national insurance contributions and the 1p cut to the basic rate of income tax.
As a result of the four-year freeze to the personal allowance, by 2025–26 the number of income tax payers will rise to 35.4 million – 1.4 million more than the current number , according to the projections.
“Giving with one hand and taking with the other in this way is opaque and stealthy – and when inflation is volatile the impact can vary hugely from what the Government initially intended.” “Some are farcical – the Christmas bonus, paid to pensioners and disability benefit recipients, has been frozen at £10 since 1977, in which time prices have more than quintupled.”
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