Sunak carries out biggest tax raid in 44 years as one in five pays higher wages

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The IFS warned the freeze is a “disincentive” and will drag hundreds of thousands of teachers, nurses and electricians into the upper tax band for the first time, adding to the cost-of-living challenge facing many workers.

Households are facing a record drop in income this year, and the International Finance Corporation said a third of the recession was due to the stealth raid.

The IFS said “essentially no nurses” and only about 5% of teachers and electricians paid more than the base rate of income tax in the 1990s. However, one in eight nurses and a quarter of all teachers will be subject to a higher income tax by 2027.

The situation was exacerbated by decades of thresholds rising more slowly than earnings, IFS said, as well as former chancellor George Osborne’s decision to lower higher price thresholds in cash before partially reversing them in mid-2010.

“More adults are paying higher taxes than ever before,” the think tank said, adding that the fees “once only for the highest paid” are now pushing working-class jobs and traditional workers into higher tax traps under Sunak’s leadership.

The upper tax rate limit is currently frozen at £50,270. The think tank has calculated that for the 40p rate to reach the same proportion of people as it did in 1991, the higher rate threshold would need to be “nearly £100,000” by 2027.

Research by the IFS also showed that 1.7 million workers were on track to start paying a marginal rate of either 60% or 45% by 2027. This is just below the proportion of adults who paid a higher rate of 40% at the start of the 1990s.

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