Use our fiscal drag calculator to see how much frozen tax thresholds have cost you
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We have created a calculator so you can work out how much extra tax you’re paying due to frozen tax thresholds, otherwise known as “fiscal drag”.
Check out our calculator here.
What is fiscal drag?
Fiscal drag happens when tax thresholds stay the same while wages rise. Because the thresholds don’t rise with inflation (rising prices/wages), more of your income gets pulled into higher tax bands — meaning you end up paying more tax, even though you’re not really earning more in real terms.
It’s a way for the Treasury to raise extra money without actually putting taxes up. For this reason, it’s often referred to as a “stealth tax”.
Tax thresholds have been frozen at their current levels since April 2022, and are now due to be frozen until April 2031. Millions of people have been dragged into paying tax, or paying tax at a higher level, because of this ongoing freeze.
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