UK households face tax rise of £3,500 a year

Taxes are likely to amount to 37 per cent of national income when voters go the polls in the next election which is expected in 2024, up from nearly 33 per cent in 2019

UK households are on course to spend 3,500 pounds ($4,270) more annually in tax than they would have without the big tax hikes introduced over the current parliament, a leading think tank stated on Friday.

Taxes are likely to amount to 37 per cent of national income when voters go the polls in the next election which is expected in 2024, up from nearly 33 per cent in 2019 when the Conservative Party won the last election under its then leader Boris Johnson, according to the Institute for Fiscal Studies (IFS).

The rise means the government run by the Conservatives, who conventionally favour low taxes, will be raising over 100 billion pounds more each year and the tax burden will be the highest since at least the 1950s, the IFS added.

This is not, for the most part, a direct consequence of the pandemic, stated Ben Zaranko, a senior IFS research economist.

Rather, it reflects decisions to increase government spending, in part driven by demographic change, pressures on the health service, and some unwinding of austerity, he said.

The current parliament was likely to represent "a decisive and permanent shift to a higher-tax economy," Zaranko added.

PM Rishi Sunak and finance minister Jeremy Hunt are resisting calls from some Conservative lawmakers to cut taxes with the opposition Labour Party leading in opinion polls.

Last week, Hunt said it was "virtually impossible" for him to cut taxes at his Autumn Statement update on the budget on November 22 because of increasing debt costs following the jump in inflation and higher interest rates.