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Fiscal Drag

  • Millions of savers to face ‘hidden tax burden’ 

    August 5, 2025

    Millions of Brits will face a ‘hidden tax burden’ this year, fresh HMRC data has revealed, as thousands more are set to pay tax on the interest from their savings. Over 3.35m people are projected to be taxed on savings interest in 2025 – where the interest earned on savings exceeds the tax-free allowance and [...]

  • Rachel Reeves ducks ‘speculation’ despite tax pledge confusion 

    July 14, 2025

    Chancellor Rachel Reeves ducked questions about her Autumn Budget plans despite growing confusion over tax pledges and definitions of “working people”.  In an interview on Monday, the chancellor reiterated the government’s pledge not to raise the rates of income tax, national insurance or VAT.  But Reeves declined to comment on whether she would introduce a [...]

  • UK economy contracts 0.1 per cent in blow to Rachel Reeves

    July 11, 2025

    Rachel Reeves’ waning growth agenda has been dealt another blow after the UK economy contracted 0.1 per cent in May.  The Chancellor has endured a bruising few weeks after government U-turns and spending splurges have cut into the fiscal headroom she outlined in the Autumn. Fresh figures from the Office for National Statistics have confirmed [...]

  • Week in Business: The tragedy of Labour’s tax addiction

    July 10, 2025

    From the housing market to the stock exchange, some taxes need to be reformed or reduced - but this government only wants to hike rates.

  • How much tax do you pay above £100k? Britain’s highest earners in numbers

    July 4, 2025

    A growing number of Brits have seen their salaries hit £100k – but a growing number are also feeling underwhelmed after having crossed the threshold. What accounts for their disappointment? There were as many as 1.35m taxpayers earning over £100,000 in the UK during the 2022/23 tax year, an increase of around 16 per cent [...]

  • Reeves urged to unfreeze income tax or risk entrenched damage

    June 26, 2025

    Rachel Reeves has been given another stark warning of the implications of extending the freeze on income tax thresholds. The Chancellor has vowed to not repeat the scale of tax rises in last year’s autumn Budget, but has not addressed whether she will stand by her promise to unfreeze income tax thresholds from 2028. Reeves [...]

  • What is fiscal drag and how you can avoid it?

    June 6, 2025

    Millions more people will find themselves paying higher income tax due to frozen tax thresholds, but there are ways to prepare. Around 8.3m people will be paying more tax by 2029, a forecast from the Office for Budget Responsibility shows. This phenomenon is known as fiscal drag. Fiscal drag occurs when earnings rise but tax [...]

  • Reeves won’t rule out extending income tax threshold freeze

    June 4, 2025

    Rachel Reeves has vowed not to repeat the scale of tax rises in last year’s  Autumn Budget as businesses brace for further hikes to meet the chancellor’s wafer-thin fiscal headroom. As much as £40bn in tax rises was unveiled in the budget, including huge hikes to employer National Insurance Contributions, which added millions of pounds [...]

  • High-tax Britain is losing the race for global talent

    April 29, 2025

    High taxes, fiscal drag and the cost of living mean London is no longer the destination of choice for skilled employees – and competitors like the Basque Country are feeling the benefits, says Ivan Jimenez I’m a proud native of the Basque Country in northern Spain, but having spent a lot of time in the [...]

  • Fiscal drag pulls nearly 2 million into higher tax bracket

    April 28, 2025

    Income tax thresholds, frozen in 2021, have pulled nearly two million Brits into higher brackets as fiscal drag bites. The number of higher rate taxpayers has increased by 1.88m, from 4.43, to 6.31m, between 2021 and 2025, according to finance specialists Rift. “Rising income taxes have been particularly punitive in recent years, as inflation reached [...]

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