Successive Conservative chancellors from Rishi Sunak to Jeremy Hunt have frozen income tax thresholds for the past four years.
The policy results in what is known by economists as “fiscal drag” – when tax thresholds do not keep up with the rising cost of living, pulling more people into higher tax brackets.
This raises a lot of money for the government. Last November, the OBR estimated that an additional £26bn would be raised by freezing the income tax personal allowance at £12,570 and higher rate threshold at £50,270, relative to allowing the tax brackets to rise in line with inflation.
