New analysis suggests that the United Kingdom is on the brink of experiencing its most substantial tax hike in over half a century due to the freeze on personal thresholds and surging inflation.

According to the Resolution Foundation, taxpayers are projected to contribute £40 billion annually by 2028, up from the estimated £30 billion at the time of Chancellor Jeremy Hunt's budget announcement in March.

The government's strategy entails maintaining the freeze on income tax and national insurance thresholds until 2028.

This development follows Hunt's dismissal of significant tax reductions this year, despite calls from the Conservative Party for pre-election giveaways during the conference.

Adam Corlett, Principal Economist at the Resolution Foundation, remarked, "Abandoning the usual practice of adjusting tax thresholds is a tried-and-tested method for governments of various political leanings to generate revenue discreetly. However, what sets this apart is the unexpectedly substantial scale of the government's £40 billion stealth tax increase."

"The reality of the most extensive and persistent income tax increase in at least 50 years is why any discussions of pre-election tax cuts will inevitably be viewed in the broader context of considerably larger tax hikes."

A Treasury spokesperson responded, stating, "Our tax burden remains lower than that of any major European economy, despite the challenging choices we've had to make to restore public finances following the twin shocks of the pandemic and Putin's unlawful invasion of Ukraine."

"Reducing inflation is the most effective tax relief we can provide at present, and we are adhering to our plan to halve it, rather than exacerbating it by borrowing to finance tax reductions."

"Since 2010, we have also removed three million individuals from the tax rolls by raising personal thresholds, and the Chancellor has expressed his desire to further reduce the tax burden. However, he has made it clear that fiscal responsibility must take precedence." Photo by Photographer: Andrew Parsons, Wikimedia commons.