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This Saturday (6 April 2019) marks the start of a new tax year. Unlike many other countries, the UK routinely – and sensibly – uprates the cash values of most tax thresholds and benefit rates each year in line with inflation, in order to maintain their real value.
In a number of cases, however, this routine uprating has now been cancelled for extended periods:
- The inheritance tax threshold has been fixed at £325,000 since 2009–10.
- Fuel duties have not increased in cash terms since April 2010.
- Most working-age benefits have been frozen in cash terms since 2015–16.
- The VAT registration threshold has been frozen at £85,000 since April 2017, and the last Budget announced that it would remain frozen until April 2022.
Some of these policies raise revenue; others give money away. But in neither case is it sensible policymaking.
Authors
Senior Economist
Stuart is a Senior Economist working in the Tax sector, and focuses on analysing the design of the tax and benefit system.
Director
Paul has been the Director of the IFS since 2011. He is also currently visiting professor in the Department of Economics at University College London.
Report details
- DOI
- 10.1920/BN.IFS.2019.BN0247
- ISBN
- 978-1-912805-19-8
- Publisher
- IFS
Suggested citation
Adam, S and Johnson, P. (2019). Dragging people into higher rates of tax. London: IFS. Available at: https://ifs.org.uk/publications/dragging-people-higher-rates-tax (accessed: 29 March 2024).
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