Households in the UK will be £1,250 worse off next year on average, due to tax hikes made in the Autumn Statement.
Sarah Coles, senior personal finance analyst at Hargreaves Lansdown, laid out the harsh figure to the ECHO after the Chancellor Jeremy Hunt froze income tax thresholds in November. Ms Coles said the "stealth" tax will have a huge impact on working people across the country.
She said: “The round of tax hikes in the Autumn Statement made for miserable reading, but even before that we were on for higher tax bills, because the freezing of the income tax thresholds means that wage rises will push more people into paying more tax – and push enormous numbers of people into higher tax bands.
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"These kinds of stealth taxes tend to slip under the radar but can have a much bigger impact than a tax hike. The Institute of Fiscal Studies estimates that freezes to personal tax thresholds will cut household income by an average of £1,250 by 2025/26.
"On top of that, the Autumn Statement brought bad news for higher earners, as the additional rate threshold was cut from £150,000 to £125,140. For those who run their own business and pay themselves in dividends, and for investors with large portfolios outside an ISA or pension, there’s also the threat of more dividend tax as the allowance halves in April.
"For those investors there’s also the risk of capital gains tax after the allowance for this is halved in April too. When you add in higher council tax and the frozen inheritance tax bands, we’re being stung for more tax on all sides."
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