UK Chancellor Rishi Sunak Reportedly Set to Freeze Income Tax Allowances for Britons

© AFP 2022 / NIKLAS HALLE'N A cashier displays multiple denominations of US dollar and Sterling bank notes.
A cashier displays multiple denominations of US dollar and Sterling bank notes. - Sputnik International, 1920, 13.02.2021
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If the reports are true, the measures could be announced in the budget next month, as the country is likely to try to recover from the pandemic-fuelled economic crisis, which is considered to be the worst in centuries.

UK Chancellor Rishi Sunak is reportedly mulling an option to freeze income tax allowances in next month's budget, according to the Daily Mail.

The Treasury is now considering cancelling planned increases to both the £12,500 (the amount people can earn before paying income tax) and £50,000 (above which people pay 40 percent tax) thresholds.

© REUTERS / UK Parliament/Jessica TaylorBritain's Chancellor of the Exchequer Rishi Sunak speaks at the House of Commons in London
UK Chancellor Rishi Sunak Reportedly Set to Freeze Income Tax Allowances for Britons - Sputnik International, 1920, 13.02.2021
Britain's Chancellor of the Exchequer Rishi Sunak speaks at the House of Commons in London

Because of inflation, the first threshold was expected to reach around £13,250 by 2024, and the second to about £53,000.

This means that millions of Britons will have to pay a much higher tax rate on a larger proportion of their income, and the government may save up to £6 billion ($8.3 billion, or 6.85 billion euros). 

The Treasury, however, has not confirmed the possible freeze.

The move, called a "stealth tax" would not directly break Tories' pledges, as the Conservative party aimed to avoid raising the income tax rates.

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