FISCAL DRAG WILL TAKE 17.9m MORE PEOPLE INTO THE TAX SYSTEM – The scale of the stealth raid is breathtaking and won’t end till 2028
The seven-year freeze on tax thresholds is set to drag nearly 18million people into the system, according to grim figures today.
HM Revenue & Customs estimates, revealed under freedom of information rules, have laid bare the scale of the stealth raid.
It has been the biggest driver of government revenues since Covid, with inflation and pay rising sharply but the level at which tax starts being collected staying the same.
Some 17.9million more will be paying the basic rate of tax by 2027-28 – when the policy is due to end – compared to its introduction in 2021-22.
They are likely to include large numbers of retired Brits, as the state pension rises above the level of the personal allowance.
Around 12million people will have been pulled into the higher rate of tax over the period, the details obtained by financial consultants Quilter indicate.
The process of ‘fiscal drag’ is expected to gather pace in between this year and 2027-28, with 11.6 million entering the tax system.
