Chancellor’s freeze to pull 5m into income tax net More than 5m lower-paid workers who currently pay no income tax will be pulled into the system over the next four years if inflation remains high, forcing them to pay tax at 20% on some of their earnings. The Centre for Economics and Business Research (CEBR) analysis also shows that around 4m UK-based workers will be pulled into the 40% tax band. This, the think-tank forecasts, will generate an additional £40bn in tax receipts for the Treasury. This comes on the back of Chancellor Rishi Sunak’s decision to freeze personal allowances. The CEBR has warned that a recent surge in inflation means the impact of the freeze is set to be significantly higher than initially calculated. CEBR deputy chairman Douglas McWilliams commented: “This is a £40bn tax rise originally planned to raise £8.2bn. It is absurd. This stealth tax rise should be reversed.” Andrew Hilton, director of the Centre for the Study of Financial Innovation and a former World Bank economist, has also questioned the freeze, saying: “There's a double squeeze from rising tax bills and rising prices. It's monstrous. Inflation pushes people into the higher tax band and the rise in prices has been jet fuelled.” Alex Lawson in the Mail on Sunday says the freeze has been “overshadowed” by the 1.15% increase in National Insurance contributions that comes into force in April.