Stories

Tue, 03 Mar 2026

Tue, 03 Mar 2026 No new tax rises in Spring Statement, but don't be fooled - tax bills are still rising

There are measures, announced ahead of the chancellor's Spring Statement, yet to take effect.
The Chancellor's Spring Statement did not include any new tax rises, but taxes are still expected to increase due to existing measures that are yet to take effect. One such measure is fiscal drag, where the thresholds for different tax rates on income have been frozen until 2031. This means that more money will be pulled out of incomes and into the tax office coffers than otherwise. As a result, the tax burden - the proportion of the nation's income going to the government - is set to rise to a historic high of 38% by 2031. Energy price volatility could also lead to further hikes in fuel duty when the next Budget comes around. Additionally, there are other risks that could lead to higher taxes, including pressures on defence and health spending, as well as higher inflation and interest rates. The Office for Budget Responsibility has flagged these risks and warns that tax or spending changes may be necessary by the autumn Budget. Furthermore, the Chancellor's long-term spending plans may need to be revised, which could also lead to tax rises. And with some public services still struggling with productivity issues, there could be a need for further investment in the next few years. Faster economic growth would help boost government revenues and reduce the need for tax hikes, but this is uncertain at present. Overall, while the Spring Statement provided some temporary relief on taxes, the outlook remains challenging for taxpayers.