Keir Starmer REFUSES to rule out scrapping ‘stealth tax’ as Britons ‘pulled’ into paying more to HMRC

Prime Minister Keir Starmer has refused to rule out extending the freeze on income tax thresholds, a move that could see millions of Britons dragged into higher tax brackets. The issue, often referred to as a “stealth tax,” has sparked controversy as it continues to impact workers and pensioners alike. 

During Prime Minister’s Questions, Conservative leader Kemi Badenoch pressed Starmer on whether the Labour government would extend the freeze, which was initially implemented by the previous Conservative administration.

Badenoch highlighted that Chancellor Rachel Reeves had previously promised not to extend the freeze in her autumn budget, calling on Starmer to reaffirm this commitment ahead of next week’s Spring Budget. 

Starmer, however, avoided directly answering the question, instead criticizing the Conservative Party’s record on the economy, NHS, and border security. He stated, “The reality is they left open borders… they trashed the economy… the NHS was left on its knees and they hollowed out the armed forces…” 

The freeze on income tax thresholds, which has been in place since 2021, has led to “fiscal drag,” where inflation and wage growth push more people into higher tax brackets without actual increases in real income. Recent data from HM Revenue and Customs (HMRC) revealed that around 680,000 more people were liable to pay the 40% income tax rate in 2022-23 compared to the previous year, with a 9.5% increase in additional rate taxpayers (45%). 

The freeze has also affected pensioners, with many paying income tax for the first time as their state pensions exceed the personal allowance threshold. Critics argue that the policy disproportionately impacts low and middle-income earners, exacerbating the cost-of-living crisis. 

As the Spring Budget approaches, pressure is mounting on the Labour government to address the issue. Starmer’s refusal to rule out extending the freeze has raised concerns that the government may be planning stealth taxes to increase revenue, potentially dragging even more people into higher tax brackets. 

What do you think about the freeze on income tax thresholds? Should the government prioritize raising the personal allowance to ease the burden on low earners and pensioners? Let us know in the comments. Don’t forget to like and follow for more updates on UK politics and finance.