The current threshold freeze, which was implemented by the previous Conservative administration following the epidemic, is scheduled to end in 2028.
This would prevent thresholds from increasing in tandem with inflation, which would force hundreds of thousands of people into higher tax brackets.
According to government sources, the party promised not to raise “the basic, higher, or additional rates of income tax” in the June platform.
This implies that the chancellor thinks raising the thresholds wouldn’t violate Labour’s election pledges because the 20p, 40p, and 45p rates would stay the same.
An additional 600,000 people would be forced to pay income tax at the higher and additional rates if the freeze were extended, according to the Institute for Fiscal Studies, a research tank.
According to the news, which broke the story first, the policy may generate £7 billion annually.
