POLL OF THE DAY: Should Labour scrap Sunak's stealth tax? YOUR VERDICT
POLL OF THE DAY: Should Labour scrap Sunak's stealth tax? VOTE NOW
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Former Prime Minister Rishi Sunak and ex-Chancellor Jeremy Hunt admitted earlier this year that a “stealth tax” on working-age people would remain in place for at least another 4 years.
Hunt and Sunak confirmed that personal tax allowances and higher rate thresholds would be frozen until 2028.
Had the Tories won the General Election, Sunak would have aimed to raise tax-free personal allowance for pensioners in line with the triple lock to prevent older Britons from paying tax on their state pensions.
When tax allowances remain at the same rate during a period when wages are rising, taxpayers are dragged into higher brackets and pay more to the taxman.
POLL OF THE DAY: Should Labour scrap Sunak's stealth tax? YOUR VERDICT
GB News
Speaking to the BBC this morning, the Chancellor said: “The tax rises that happened as a result of the pandemic and the energy shock, these two giant shocks, will stay for their allotted time period.
“I can absolutely undertake that the threshold freeze that we introduced until 2028 will not continue after that.”
Speaking to the BBC back in May, Hunt said: “The tax rises that happened as a result of the pandemic and the energy shock, these two giant shocks, will stay for their allotted time period.
“I can absolutely undertake that the threshold freeze that we introduced until 2028 will not continue after that.”
The personal allowance and basic rate income tax band have been frozen until 2028 GETTYHowever, now that Sunak and Hunt have been ousted from No10, Labour could choose to immediately scrap the stealth tax.
Tom Selby, the director of public policy at AJ Bell, explained: “If tax thresholds remain frozen until 2028, millions of Brits will be pulled into paying substantially more income tax through ‘fiscal drag’.”
The Office for Budget Responsibility (OBR) forecast that Hunt's “stealth tax” will pull nearly four million additional taxpayers into higher tax threshold by the 2028-29 tax year.
Selby added: “Had the personal allowance, currently frozen at £12,570, been inflation-linked since 2021/22 when the freeze was implemented, then it would be forecast to rise to £15,989 by 2028 – nearly £3,500 higher than if the deep freeze remains.”
In the exclusive poll for GB News membership readers, an overwhelming majority (85 per cent) of the 634 voters thought Labour should scrap Sunak's stealth tax, while just 12 per cent thought they shouldn't. Three per cent said they did not know.