The Impact of Conservative Party Budgets: Millions of UK Taxpayers Facing Higher Taxes
Recent findings by the Liberal Democrats have uncovered a concerning trend – 6.5 million UK taxpayers are being pushed into higher tax bands as a result of Conservative party budgets. This includes 15,000 individuals in Chancellor Jeremy Hunt’s own constituency, highlighting the widespread impact of these policies as the country approaches a general election.
The freeze on the personal allowance (£12,570) and the higher rate of income tax (£50,270) until April 2028 has led to more people being subjected to higher tax rates through a phenomenon known as ‘fiscal drag’. This stealth tax effectively results in a greater portion of people’s income being taxed as they cross tax thresholds earlier than expected.
The Liberal Democrats have projected that by 2022/28, 6.5 million individuals, including those in South-West Surrey, will experience a higher band of income tax due to these stealth taxes. Treasury spokesperson Sarah Olney MP expressed disappointment in the situation, stating, “Jeremy Hunt owes an apology to the millions of hardworking Brits who will be forced to pay more tax as a result of his swindling budgets.”
The attempt by the Conservative party to gloss over these tax increases has not gone unnoticed. Seb Maley, CEO of Qdos, a tax compliance provider for the self-employed, remarked on the impact of these policies. “This is damning. Millions of taxpayers are being dragged into higher tax thresholds because of fiscal drag. With a general election on the horizon, this sleight of hand from the government could ultimately lead to its undoing.”
Maley also highlighted the plight of limited company directors, who have been hit hardest by tax hikes in recent years. From IR35 reform to the Corporation Tax increase and reduction of tax-free dividend allowance, the government’s actions have taken a toll on small business owners who traditionally supported the Conservative Party. “Given that many of these people would have traditionally voted for the Conservative Party, it feels like self-sabotage.”
The implications of these tax policies are far-reaching, affecting individuals and businesses alike. As the country prepares for a general election, the issue of fiscal drag and higher tax rates is likely to be a focal point of discussion among voters.