Highest tax burden since World War II

MILLIONS of Britons will be hit by the highest tax burden since the Second World War after Jeremy Hunt took drastic action to balance the country’s finances.

- Martyn Brown

In his searingly bleak Autumn Statement the Chancellor unleashed a thumping £25billion worth of tax rises, warning people must make “sacrifices” to weather the economic turmoil.

His brutal squeeze includes a five-year freeze in income tax thresholds that will mean nearly six million people are dragged into higher rates.

Mr Hunt also announced the threshold for the 45p rate of income tax would fall from £150,000 to £125,000, dragging a quarter of a million people into the highest rate.

Figures suggested that in five years’ time, as pay rises take effect, 3.2million people will be liable for tax for the first time, with 2.6million more in the higher rate 40 per cent band. Nearly all local authorities are expected to increase council tax by five per cent, with a bill for a typical Band D property rising by £250 by 2027-28, after the Chancellor allowed authorities to raise it without holding a local referendum.

Rebellion

Mr Hunt said: “I have tried to be fair by following two broad principles: firstly, we ask those with more to contribute more. And secondly, we avoid the tax rises that most damage growth.” The bleak backdrop was the Office for Budget Responsibility watchdog’s forecast that the economy is already in recession and will shrink by around 1.4 per cent next year.