Dragging people into higher rates of tax

Document type
Adam, Stuart; Johnson, Paul
Institute for Fiscal Studies
Date of publication
4 April 2019
IFS Briefing note; BN247
Social Policy, Poverty Alleviation Welfare Benefits and Financial Inclusion, Employment
Social welfare
Material type

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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.

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