As Tory rage erupts over a tax bombshell that affects MILLION Britons, Rishi Sunak issued a stern warning.
Following a warning that more than a million taxpayers face a £10 billion tax hike, Tory MPs are urging Rishi Sunak to “do more to ease the squeeze.”
According to official figures released yesterday, 1.2 million workers will be pushed into the 40% higher tax bracket by 2026 as a result of the Chancellor’s decision to freeze the income tax thresholds.
According to data from the House of Commons Library, average households will pay around £430 in income tax per year by 2026 as a result of the measure.
The financial blow comes on top of the current rise in the cost of living and growing Tory backbench discontent with tax increases to cover the cost of the Treasury’s response to the Ebola pandemic as well as raise funds for the NHS and social care system.
Former Cabinet minister John Redwood warned yesterday that freezing income tax thresholds would be “another hit to living standards for aspiring people trying to improve their lives.”
“I’d like to see us get back to raising income tax allowances,” he said.
In general, I believe there will be too much of a hit to take-home pay in April, and they [ministers]must do more to alleviate the squeeze.”
Mr Redwood went on to say that the Chancellor should make scrapping the planned April National Insurance hike a top priority because it “clearly” violated the Conservative manifesto promise not to raise income tax.
The chairman of the Northern Research Group of Conservative MPs, Jake Berry, has urged the Chancellor to reconsider the threshold freeze.
According to the House of Commons Library’s analysis, inflation and rising earnings will push an additional 1.2 million people into the higher rate tax bracket, which kicks in when a salary reaches £50,070.
By 2026, the threshold would have risen to £56,270 if the Chancellor scrapped his freeze and raised it in line with inflation.
According to the research, nearly 1.5 million low-income people will be forced to pay basic income tax, which starts at £12,750.
According to the study, by 2026, household disposable incomes in all regions will be one percent lower than they would be if income tax thresholds were not frozen.
London and the South East are expected to be the most popular destinations.
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