Has Your Tax Band Changed? 1.9 Million Brits Affected by 20230

Millions of workers across the UK are being quietly pulled into higher tax brackets — not because they’re earning more, but because the government has frozen thresholds. Here’s what’s happening, who’s affected, and how it could hit your wallet.

The UK government’s decision to freeze income tax bands and allowances means that as wages rise, largely due to inflation. More people are being dragged into higher tax brackets. This phenomenon, known as fiscal drag, is expected to affect 1.9 million workers by 2030, despite many not seeing a real increase in disposable income.

For instance, A person on minimum wage will pay £750 more in income tax compared to two years ago — a 40% jump. The real crunch will be felt in London and Southeast, who could fact £3 billion in extra tax by the end of the 2029–30 fiscal year. The average Londoner earning 50% above the median wage could pay an additional £2,700, a rise of nearly 25%.

The squeeze is falling hardest on middle-income earners, many of whom are being bumped into the 40% higher tax band simply because their wages are keeping up with inflation. These are not the super-rich — but nurses, teachers, and civil servants now shouldering a heavier tax burden.

Critics, including Liberal Democrat MP Daisy Cooper, have dubbed this a “stealth tax bombshell,” warning that during a historic cost of living crisis, the government is effectively raising taxes without technically announcing it.

“People are being hammered by stealth, at a time when they can least afford it,” said Cooper.
Chancellor Jeremy Hunt is under pressure to maintain fiscal credibility under all this, while funding costly policy pledges, such as: Scrapping the two-child benefit cap (projected to cost £3.5bn) and reversing cuts to the winter fuel allowance.
With just £9.9bn in fiscal headroom, the Treasury may seek to quietly raise tax revenue through mechanisms like the tax band freeze, avoiding overt tax hikes while still pulling in billions.
There’s little the average worker can do to avoid fiscal drag but being aware of your bracket and using salary sacrifice schemes (like pensions or childcare vouchers) can reduce taxable income.

Ultimately, the debate over fiscal headroom reveals a deeper flaw: that the government’s own self-imposed rules are constraining meaningful investment and forcing stealth tax rises, not out of necessity, but out of political design, putting the average earner in a compromising position.