Frozen tax thresholds push one million more into income tax
New research indicates that frozen income tax thresholds have resulted in an additional one million people paying income tax.
The Full Story
A plain summary built from the channels that reported this story.
New research from the Taxpayers Alliance, shared exclusively with GB News, has revealed that frozen income tax thresholds have pushed an additional one million people into paying income tax this financial year compared to last. The analysis of HMRC data shows that the average taxpayer will hand over about £640 more in income tax than two years ago, and compared with 2023-24 the figure is over £1,000 more.
The phenomenon, known as fiscal drag, occurs when tax brackets are frozen while wages rise, pulling more people into higher tax bands. Of the one million extra taxpayers, around 500,000 are paying basic rate tax for the first time, 410,000 are now paying the higher rate, and 70,000 have moved into the additional higher rate. The Taxpayers Alliance said this is hitting low earners and working people, including teachers, nurses and police officers.
The freeze was originally introduced by the previous Conservative government and was due to end in March this year. Chancellor Rachel Reeves extended it to 2030-31, meaning the policy is now expected to raise an extra £55 billion by the end of that period. If the basic rate threshold had risen with inflation, it would now stand at £16,000.
The story has also drawn attention to a shift in position from the new Prime Minister, Andy Burnham. During the election campaign, Burnham promised to tackle frozen tax thresholds, but when asked about it on his third day in office, he said there was "no commitment at this point to change" and that the matter would be looked at in the budget. Critics have called this a U-turn, though supporters argue he was simply being honest about the need to review spending first.
On a panel discussion, former Labour Defence Secretary Geoff Hoon said the policy was inherited from the Conservatives and that Burnham had not rowed back, but would consider it in a comprehensive spending review. Former Tory Chancellor Kwasi Kwarteng accused Labour of sticking to a stealth tax they had criticised, while Jacob Rees-Mogg suggested Burnham had made a mistake through ignorance rather than a deliberate U-turn. Rees-Mogg also highlighted the unfairness of freezing tax thresholds while benefits remain index-linked.
On screen
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Key Claims
Claims reported during this story's coverage, mapped by channel. Ordered by how many channels carried each claim.
| Claim | GB News |
|---|---|
| The freeze on income tax thresholds is forecast to bring one million more people into paying income tax, increase the average taxpayer's bill by £640 compared to two years ago, and raise an extra £55 billion by 2030-31. |
Channel Perspectives
What each channel focused on, with key quotes.
GB News framed the story as an exclusive scoop, emphasising the scale of the tax burden and portraying Andy Burnham's comments as a U-turn. The tone was critical of the government, with the host and panelists describing fiscal drag as a 'stealth tax' and questioning the Prime Minister's competence. The channel gave significant airtime to the Taxpayers Alliance and a panel debate featuring former ministers.
- “a whopping one million additional people and are forecast to pay income tax this financial year compared to last year”
- “the dreaded fiscal drag means more and more people pay tax whether they like it or not”
- “Andy Burnham just made a mistake. He didn't realise how much it cost. And I think it's ignorance rather than necessarily a U-turn.”
Broadcast Timeline
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