Martin Lewis will interview Rishi Sunak this evening on his self-titled ITV show, but ahead of the event, he provided further insight into the changes which will affect Britons. Yesterday, the Chancellor announced a wide range of updates in relation to taxation as well as Government support which will be offered over the next year. While Mr Sunak’s Budget has been widely viewed as one which has been particularly generous with support, there have been significant tax changes announced.
One such change has been the pension lifetime allowance, which will be frozen for five years.
Income tax is also set to undergo a freeze after this tax year, in what is likely to have implications for working Britons.
For those looking for further clarity about what the situation will mean for them, Martin was thankfully on hand to offer a detailed explanation.
Specifically, Martin was asked about the changes to Income Tax, a major decision taken by the Government yesterday.
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Martin went on to explain that while the thresholds are set to increase in the coming tax year, there will be changes after this point.
Income tax bands will then be frozen, which is likely to have implications for Britons which Martin outlined.
He went on to state: “As average earnings tend to rise each year, more and more people will go above the threshold meaning they will pay a higher proportion of income in tax.
“It is a rise, it is quite a clever one, as people won’t notice it that much.
“The Chancellor is able to say things like he is not changing the amount of tax people pay now on their current income.
“But of course, with inflation and average earnings rises predicted, this is what is known as fiscal drag – it drags the money in without doing very much.
“It’s going to be billions of pounds that one will raise for the Exchequer, but I’m not sure in a way that people will consciously feel in their pockets.”
Income Tax is a levy which Britons will need to pay on particular types of income and they can expect the levy to be collected by HM Revenue and Customs.
The levy affects money such as earnings, profits made if a person is self-employed, and certain state benefits.
It additionally has an impact on Government support schemes such as furlough and SEISS.
Martin Lewis will be speaking to the Chancellor of the Exchequer in an interview on his Martin Lewis Money Show: Live this evening on ITV at 8.30pm.
He is expected to ask Mr Sunak about a wide range of support measures announced as well as what the Budget will mean for Britons in both the short and long-term.
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