UK tax thresholds to rise after 2031 as personal allowance and higher rate limits set to increase with inflation

The UK government has frozen income tax thresholds since 2018, pushing more earners into taxable brackets. According to the Office for Budget Responsibility, these frozen thresholds will end after 2031, with personal allowance and higher rate limits rising with inflation. The Institute for Fiscal Studies estimates over six million additional people will have been drawn into paying income tax by 2031 due to the freeze. Basic rate taxpayers would save up to 198 pounds annually, and higher rate taxpayers 395 pounds, if thresholds had been unfrozen.