Brits are being hit by a stealth tax from the government that will cost £10.9 billion by 2026, according to new research.
People around the country have already noticed hikes in prices from food to energy costs and a tax measure brought in last March is also hitting them in the pocket.
The government stated it was putting a freeze on personal tax allowance at £12,570 and the higher rate tax threshold at £50,270, until 2025/26.
It is estimated that this will hit families in the UK, apart from Scotland, by around £10.9 billion or £430 per household, according to research commissioned by the Liberal Democrats.
New analysis by the House of Commons Library shows that a further 1.5 million people who are on low pay will have to start paying tax by 2026.
Similarly at the other end of the scale there will be 1.25 million people who will have landed in the higher tax bracket by 2026 due to the freeze at £50,270.
The figures have been worked out based on modelling using inflation forecasts by the Office for Budget Responsibility.
With many people already suffering financially as a result of Covid and rising costs, it has led to criticism from the Liberal Democrats who say the tax will “clobber families who are already feeling the pinch”.
The stealth tax is set to hit London and the South East hardest with the figures showing that the average family could have to splash out £500 more, and a total of a further £1.9 billion is to be paid in the region by 2026.
Liberal Democrat Treasury Spokesperson Christine Jardine MP said: " Boris Johnson must drop this unfair stealth tax that will clobber families who are already feeling the pinch.
“People are worried about the rising cost of living and paying their bills this winter. Now they face years of tax rises under a Conservative government that is taking them for granted.
“Many lifelong Conservative voters in Blue Wall areas feel this government no longer represents them. It's little wonder that so many are now turning to the Liberal Democrats instead."
In Scotland the figures will be different as the basic rate bands of tax will rise with inflation but the higher tax bands will be frozen.
A government spokesman was reported to have said: “The UK has the highest basic personal tax allowance in the G20 – and maintaining the threshold is a progressive approach to fund our world leading public services and rebuild the public finances following Covid.
"Higher earners will continue to contribute more and nobody’s take-home pay will be less than it is now in cash terms."
