Commenting on income tax thresholds and fiscal drag, Christine Cairns, tax partner at PwC, says:
“The announcement that there would be no extension to frozen income tax thresholds beyond 2028 was a welcome surprise and the closest we got to a tax giveaway. However the tax revenue foregone from 2028 will be more than recouped by the increase in Employers’ National Insurance Contributions and the reduction to the threshold from which contributions are paid. While this rise may not be felt immediately in the public’s pockets, the potential indirect impact on pay and disposable income in the coming years could compound that of another four years of fiscal drag.”
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