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Manchester Evening News
Manchester Evening News
National
Matthew Smith & Rachel Pugh

Martin Lewis warns income tax is about to increase for MILLIONS of Brits - despite being frozen

Last night Money Saving Expert Martin Lewis hosted a special one-off edition of his ITV show.

The Martin Lewis Money show welcomed guest Rishi Sunak to chat with Martin about the 2021 Budget, and how it will impact REAL people - people who often feel forgotten about and snubbed when new policies are announced.

As part of the show, Martin took Rishi to task over Chancellor about what some people had termed a "stealth tax".

However, the consumer champion explained that he believed the Government had been transparent about the steps - just that some Brits may not realise what it actually means.

Martin showed a graph that showed the Income Tax Personal Allowance of £12,500 would stay frozen.

However, for most people their pay will rise with inflation - meaning that they will still end up paying more tax.

Martin said that this could affect almost every worker earning more than £12,500.

He said: "No matter what you earn, as your earnings increase a bigger proportion goes in tax - that's how the Chancellor makes money from it."

Mr Sunak said that people on the average wage of £27,000 would be paying 77p more a week as a result of the change.

The Chancellor said: "Those on lower incomes you're right, I really want to help. The threshold of £12,500 is higher than basically any other country in the world.

He added: "For those people, remember the national minimum wage is going up more than inflation."

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