29 September 2023

The Institute for Fiscal Studies (IFS) has forecast that the UK will have the highest tax burden since comparative records began.

The IFS predict that UK tax revenues will reach 37% of national income by the end of the tax year. Last general election, this stood at 33% and the increase in 4 percentage points would represent an addition £100 billion in tax revenue next year. This equates to £3,500 per household.

The largest offenders when it comes to increasing taxes are the main rate of corporation tax, the energy profits levy and freezes to National Insurance and income tax thresholds. The last is something that payroll professionals know all too well and are commonly referred to as a stealth tax. While less noticeable than new taxations or tax cuts, it often has a large impact on actual household income and disproportionately affects lower income households.

With the autumn statement around the corner and a looming general election, we are waiting with bated breath to see what taxation changes are coming. The CIPP will keep you updated of any changes you need to be aware of for the coming tax year, and beyond.

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