@antonia_investing: ‘Who else can we tax to pay for benefits for others…’. The government did not raise your tax rate. They did not need to. Income tax thresholds have been frozen since 2021 and will stay frozen until 2028. Your salary has risen. The thresholds have not. That gap is fiscal drag, and it is how HMRC collected £6.3 billion more in April 2026 than the same month last year. If the personal allowance had risen with inflation since 2021, it would sit at around £15,000. It is still £12,570. That means roughly £2,430 of income that would previously have been tax-free is now inside the tax net. If a pay rise has taken your salary just over £50,270, the portion above that threshold is now taxed at 40%. Not because the rate changed. Because the threshold did not move while your salary did. The most practical response for most people is salary sacrifice into their pension. It reduces your gross salary on paper, which reduces how much of your income sits above a threshold. If you have crossed into the 40% band, pension contributions can bring your taxable income back below it. The take-home cost is usually lower than people expect, because you are redirecting money that would have been taxed at 40% anyway. The same logic applies approaching £100,000, where the personal allowance begins to taper. Salary sacrifice can restore it. Check whether your employer offers salary sacrifice and model the impact on your tax band before the next pay cycle. This is general information, not personal financial advice. Tax treatment depends on individual circumstances. If you are unsure what is right for you, speak to a regulated financial adviser. Sources: HMRC tax receipts April 2026. OBR inflation forecast data. UK income tax thresholds 2026/27, HMRC. House of Commons Library, fiscal drag briefing April 2026.

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Tuesday 02 June 2026 14:05:14 GMT