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Tax thresholds remain unchanged - here's what it means for your pay
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Published 10/28/2026 1:12:24 PM
Tax thresholds remain unchanged - here's what it means for your pay
Income tax thresholds, which have been frozen under successive chancellors, will stay at current levels until April 2031 as planned. But after that they are expected to start to rise again with inflation.
John Healey may not have mentioned the end of this policy in his Budget speech - after all, it is still some way off - but according to the documents released by the Office for Budget Responsibility (OBR) the freeze, which has been shaving additional tax off people's take-home pay for the past five years, is scheduled to end.
The proportion of your income that is taken in tax will continue to go up over the next four years in line with decisions made in previous Budgets.
But then the personal allowance - the point at which you start to pay tax - and other thresholds, where you tip into paying a higher rate of tax, will rise again with inflation, meaning you keep more of what you earn.
Freezing thresholds is often dubbed a stealth tax because, unlike raising the headline rates, it is not as obvious on your payslip.
It has been a useful way for chancellors from Rishi Sunak onwards to raise more money to help pay for things like defence, the NHS, schools and support for the sick, disabled and the elderly.
The amount of extra money brought in by freezing tax thresholds has risen steadily every year, and is due to reach £58bn by 2030-31, more than the UK government spends on transport and not far off current defence spending.
