Jessica O'ConnorReports that the Chancellor will drop plans for an income tax rise have raised fresh questions about where the Government will find fiscal headroom in the upcoming Autumn Budget, according to analysis from Rathbones.
A recent survey by the wealth manager, conducted with more than 3,000 UK adults, found that an income tax hike was among the public’s top Budget concerns, cited by 40% of respondents and second only to potential pension changes at 44%.
Charlotte Kennedy, chartered financial planner at Rathbones, said the suggestion of a retreat from income tax increases “is jarring, especially after her recent pre-Budget speech seemed to signal an increase.”
Kennedy warned that with a sizeable shortfall still to address, dropping an income tax rise “could put other unsavoury tax changes back on the table.”
She added that taxpayers were already facing higher effective income tax bills due to frozen thresholds, which “pushes people into higher tax brackets as their earnings rise.”
She said: “With less than two weeks to go until Budget Day, a smorgasbord of ideas is being tested on the public ahead of the fiscal event.
“A recent Rathbones survey of more than 3,000 UK adults revealed that potential changes to pensions, income tax and inheritance tax regimes are the leading concerns ahead of the Budget.
“Amid the uncertainty, it remains sensible to avoid knee-jerk reactions and irreversible decisions that could undermine your financial resilience.”
