Tax load will be at highest since 1948

BRITAIN’S tax burden is on course to reach its highest level since 1948 despite cuts to National insurance – as millions are caught out by stealth taxes.

the level of taxation raked in by the treasury will hit 37.1 per cent of GDP by 2028, according to the office for Budget Responsibility (OBR).

Families and businesses are being made to pay as the Government tries to balance the books – though that will still not be enough to stop the UK’s debt pile spiralling to an expected £3trillion.

the Chancellor boasted in the Budget that his Ni cuts meant that the ‘effective’ personal tax rate for the average earner is now the lowest since 1975.

But that is explained by the fact that higher earners are being more heavily punished while over the years the tax burden has shifted from personal taxes and towards indirect levies, such as Vat.

in fact, more hard-working people are being snared in the taxman’s net because income tax thresholds have been frozen since 2022, adding an extra £7billion a year. the OBR forecast says the freeze will mean 3.7 million more people paying taxes by 2028/29 because the threshold has been held at £12,570 – above which taxes of 20 per cent are due.

there will be a total of 3.2 million paying at the higher rate of 40 per cent, due on incomes above £50,270, and the additional rate of 45 per cent, which applies to those earning £125,140 or more.

While the Ni cuts will help ease the burden, it will do nothing to help the eight million pensioners who pay income tax but are not subject to Ni.

the Resolution Foundation found they will end up paying £960 a year more.

the rise in the tax burden will mean the treasury raking in £34.3billion more five years from now than they would have done had it stayed the same as it is now.

it is already at 36.1 per cent of GDP. Ni cuts will knock about half a percentage point off where it would have gone, so not reaching the 37.2 per cent level of 1948.