Tax burden to hit 30-year high

Tax is set to rise as a share of the UK’s income to its highest level in three decades, according to a report from the Institute for Fiscal Studies. Around £17bn of tax rises are planned over this parliament, pushing the tax share of GDP above 37% of national income for the first time since 1986-87. Austerity will continue into the 2020s, after Chancellor Philip Hammond’s decision to scrap a target of balancing the nation’s books, the report added. Although the government has announced some tax cuts, including a rise in the income tax personal allowance and higher rate threshold, these will be more than offset by a higher tax on dividend income, an increase in tax on insurance premiums and a restriction on pension contributions for those on high incomes. Furthermore, hundreds of thousands of people have also been dragged into paying the higher rate of tax because the threshold at which it is paid has failed to keep pace with rising inflation.