Boris Johnson has already announced National Insurance rates will be increasing from April to cover rising NHS costs. On the flipside of this, Mr Sunak has assured the Government will be lowering tax costs where possible to ease the burden on taxpayers.
The Chancellor already announced a series of tax freezes in the Spring Budget but Shaun Robson, the Head of Wealth Planning at Killik & Co, warned it is important “not to underestimate” the effect of tax freezes as they can result in more taxes due where income and assets are hit by inflationary increases.
This will likely be on many people’s minds as inflation in the UK recently hit 5.1 percent, the highest raise seen in around a decade.
Mr Robson argued the freezes are “thus a way for the Government to increase tax revenue through measures short of introducing additional taxes and could be argued to fall into ‘stealth tax’ territory”.
He continued: “This remains an interesting topic for 2022, especially in light of reports that the Chancellor may be looking to reduce income tax rates and in fact abolish the top additional rate income tax band prior to the 2024 election – a move that could cost the Government significantly given their largest revenue comes from income taxes according to the Office for Budget Responsibility.