but not a ‘specific’ manifesto breachRachel Reeves says she recognises that she “has asked working people to contribute a bit more” and that this means “working people will pay a bit more”.
But the chancellor tells Sky News she does not believe this means that her budget has breached Labour’s manifesto commitments on tax.
She adds: “We were very specific in the manifesto that we wouldn’t increase the rates of income tax, National Insurance or VAT.”
The government has not increased these specific taxes, though taxes overall have risen by more than £26bn.
Income tax threshold freeze will cost basic-rate taxpayers £220
Basic-rate taxpayers will pay £220 more tax per year as a result of the extend the freeze to income tax thresholds, the IFS has said.
In its analysis of the budget, the economics think-tank said for a higher-rate taxpayer, the impact rises to £600 per year.
Rachel Reeves yesterday extended the existing threshold freeze a further 3-years until 2031.
Helen Miller, the IFS director, said this morning it meant around 700,000 more people paying any income tax and one million more people paying a higher rate.
“By 2029 more than a quarter of all taxpayers are expected to be higher- or additional-rate taxpayers,” she said.
