Stealth tax raid will cost workers £78bn by 2028 The decision not to increase income tax bands with inflation will cost taxpayers an estimated £78n in extra tax between 2022 and 2028, according to the Centre for Economics and Business Research (CEBR). The Office for Budget Responsibility originally predicted the freeze would cost taxpayers £1.6bn in 2022/23 and £3.7bn in 2023/24. In 2022 it updated these forecasts to £2.9bn and £10.4bn, to account for rising inflation. However, the CEBR estimates that additional tax receipts for the 2022/23 and 2023/24 financial years are set to hit £4.7bn and £17.6bn respectively, due to high wage inflation. Prime Minister Rishi Sunak froze income tax thresholds in 2021 while he was Chancellor. At the time, inflation was running at just under 4%. Since then, it has risen to 10%, pushing up wages and driving up how much workers pay in tax. While HMRC data shows that 100,000 workers were dragged into higher-rate tax bands in 2019/2020 and 2020/2021, the CEBR study suggests that 4m taxpayers will be dragged into higher income tax bands by 2028. Daniel Pryor of the Adam Smith Institute think-tank said: “Freezing thresholds is no way to manage the nation’s finances – any tax rise should be clear, transparent and not subject to volatile shifts in inflation,” while John O'Connell of the TaxPayers' Alliance has urged ministers to raise tax thresholds in line with inflation. Motorsport business owners will be oly too aware of the rising tax burden on themselves and their businesses - and it will get worse!