Autumn statement: Chancellor freezes many personal tax thresholds

In his 2022 autumn statement the chancellor confirmed that the income tax personal allowance (£12 570) and higher rate threshold (£50 270) along with the main National Insurance contributions thresholds will be frozen until April 2028.

On the decision to freeze the personal allowance and higher rate threshold Sarah Gabbai McDermott’s tax lawyer said: ‘While the “fiscal drag” technique of freezing basic and higher income tax rate bands is a more politically palatable way of raising taxes than rate increases the consequential National Insurance cost to employers will be made even more significant than in previous Budgets since employers will feel pressure to increase earnings to keep pace with inflation. Today’s announcements will therefore exacerbate the existing fault line in the tax system between employment income and other forms of income and gains thereby driving employers to seek alternative forms of...