The income level at which people begin paying tax, along with the threshold for moving into a higher rate, will remain frozen for another three years. The decision means the thresholds will not rise during that period, even as individual pay may change.
The freeze affects two key points in the tax system: when income first becomes taxable and when earnings become subject to a higher rate. Both thresholds will stay at their existing levels for the additional three-year period.
For workers whose pay increases, the unchanged thresholds could affect how much of their income is taxed. As earnings rise while the points at which tax rates apply remain fixed, more pay may fall within taxable bands or bring some people closer to a higher rate.
The policy is therefore expected to have a significant bearing on take-home pay over the coming years. The supplied information does not specify the threshold amounts or provide further details about the timing of the freeze.
