Income Tax to bring £13bn into the British economy

income tax

Written by EKWilliams Team


April 6, 2022

Back in 2021, Chancellor Sunak announced in his budget that income tax personal allowance and the higher rate threshold would remain frozen for four years – from 2022/23 until 2025/26. 

As previously announced, the Income-tax increased to  £12,570 for 2021/22 and has remained frozen. 

According to IFS analysis, £20.5bn will be collected in tax rather than £8bn Sunak predicted in March 2021. The freeze in income tax and rising inflation indicate that the treasury will collect £13bn more than predicted. Income tax thresholds usually rise along with inflation, yet they were frozen when inflation was 1.6%. With inflation expected to rise to 8%, more people are expected to begin paying taxes or pay a higher tax rate. 

These are the income tax rates and bands according to the Gov.UK website. 


Band Taxable Income Tax Rate
Personal Allowance Up to £12,570 0%
Basic Rate £12,570 to £50,270 20%
Higher Rate £50,270 to £150,000 40%
Additional Rate Over £150,000 45%





Source: GOV. 

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