Households in the UK will be around £1,450 worse off as a result of Liz Truss' "tax cutting" mini Budget, according to new analysis.
The typical basic rate taxpayer will pay an added £500 in income tax and National Insurance per year by 2026 while higher rate earners are facing a £3,000 annual increase. Experts from the Institute for Fiscal Studies (IFS) say households will £1,450 a year worse off, according to The Telegraph.
The figures are based on analysis of the decision by Kwasi Kwarteng to freeze tax thresholds, which in three years' time will deliver an extra £41bn to the Exchequer amid high inflation and rising wages. Meanwhile, his cuts to personal taxes will be worth only £20bn, Birmingham Live reports.
READ MORE: DWP to give millions a £300 boost from next month
Tom Wernham, a research economist at IFS said: “Of all the changes to taxes and benefits over the next three years, freezes to various tax and benefit thresholds and allowances are the most significant and least transparent.
“Freezes far more than outweigh headline policies such as the 1p cut to the basic rate of income tax, or the reversal of the health and social care levy, and they are set to drag millions more into the tax system and into higher rates of tax."
A Treasury spokesperson said: “This Government is committed to a high growth and low tax economy and helping people to keep more of their hard-earned money is a key priority, as seen by our commitments to cancel the rise in national insurance and reduce the basic rate of income tax."
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