Millions of Brits are braced for a “monstrous” and “absurd” £40billion stealth tax shock as Rishi Sunak faces mounting pressure to abandon the four-year-freeze on income tax thresholds.
The Chancellor is under pressure to raise income tax thresholds in line with inflation.
According to a study by the Centre for Economics and Business Research, nine million workers will be made to pay more tax as a result of the freeze.
The CEBR analysis for the Mail on Sunday reveals five million low-paid workers are expected to pull into the tax net in the next four years.
These non-taxpayers will have to pay up nearly 20 percent of a piece of their wages.
At the same time, another four million Brits will be forced into the 40 percent higher tax band.
Douglas McWilliams, CEBR deputy chairman said: “It is absurd. This stealth tax rise should be reversed.”
Mr Sunak brought forward the freeze before the latest rise in inflation, which has increased to 5.5 percent – its highest for 30 years.
Workers will be faced with a “double squeeze” due to the frozen allowances, as household bills and National Insurance soar.
Director of the Centre for the Study of Financial Innovation, Andrew Hilton, said: “There’s a double squeeze from rising tax bills and rising prices. It’s monstrous.”
Households are facing the highest inflation for nearly 30 years and more pain is on the horizon with rocketing energy bills and a tax hike due this spring.
Calls are growing for the Government to do more to tackle the cost of living squeeze, including axing April’s planned national insurance increase.