“A million more workers will pay income tax this year as Burnham backtracks on personal allowance increase”
What actually happened
Personal tax thresholds, frozen since 2021 and due to stay frozen until 2030/31, continue to pull more people into tax as wages rise, a process known as fiscal drag. Andy Burnham raised the possibility of increasing the £12,570 personal allowance after hearing "frustration" during a by-election campaign, then walked it back within days, with allies confirming no firm commitment was made and no allowance change featured in this week's cost-of-living package.
Key facts
- The article's own lead states: "A million more workers and pensioners will have to pay income tax this year and Andy Burnham backtracks on his plans to increase the personal allowance."
- HMRC estimates the number of basic-rate taxpayers will increase to 31.4million, from 27.4million in the year the freeze was implemented.
- Taxpayers' Alliance analysis found 1million more people will pay £640 more on average in income tax this year compared to two years ago.
- Analysis shows 500,000 more Britons will have to pay the basic rate of tax this year.
- 410,000 more expected to pay the higher rate of tax on a portion of their income as their salaries exceed £50,270, with an additional 70,000 additional-rate taxpayers in the current year.
- The Taxpayers' Alliance's analysis shows that the number of pensioners liable for income tax will jump by 630,000 to 10.2million this year.
- Burnham's allies have since said the Prime Minister had not made any commitment and it was not part of a package of cost-of-living measures announced this week.
What to watch for
Watch the autumn Budget for whether "looked at" produces anything concrete, or whether the Treasury's "£55billion in tax revenues the freeze is expected to raise by 2030" proves too tempting to give up. Also watch whether follow-up coverage keeps conflating the "1 million paying more" stat with the smaller "500,000 newly dragged into basic rate" stat, since they measure different populations.
