Middle-class families face £8,000 Labour tax raid in 2025

December 28, 2024
Farmers holding a rally and mass lobby of MPs at Westminster over tax changes

Analysis indicates that middle-class families will see an increase in their tax bills of £8,000 in 2025. Households will pay thousands more in taxes next year due to a number of Labour tax increases, including council tax and the cost of their children's education.Chancellor Rachel Reeves, who raised taxes by £40 billion in her first budget, has also stated that she does not rule out more raids in the upcoming year. With the tax burden "rising to levels that we haven't previously seen in this country," families would undoubtedly feel pressured, the Institute for Fiscal Studies (IFS) said last night.of tax raid is completely unacceptable and fails to understand what it’s like to try and bring up a family to a reasonable standard. This Government is completely out of touch with middle Britain.”He said that Labour’s policies so far have led to “one of the biggest transfers from the aspirant class to the public sector that anyone has ever seen”, adding: “It sends out a shocking signal to anyone who is trying to do the right thing by themselves and their family to try and get on in life.“We are heading for a January of discontent. The best New Year present that Rachel Reeves could give is to change and change tack quickly.”

A middle-class family with one child attending a private school would be hit by an extra £7,730 of taxation next year.This assumes the household is made up of two adults each with a salary of £55,910, the average wage of those in the top 20 per cent of earners, according to the Office for National Statistics.ongoing tax threshold freeze and £1,410 as a result of the increase in employer national insurance, 60 per cent of which will be passed on to workers and consumers according to the Office for Budget Responsibility.

It also includes a £2,626 increase in additional private school fees, after the VAT raid comes into effect, an extra £14.50 of shopping bills owing to the “grocery tax” and £159 in potential council tax rises.A family looking to buy a second home would also be hit with an extra £5,975 in stamp duty, bringing their total tax hike to over £13,000.

Writing in, Bridget Phillipson, the Education Secretary, defended the private school VAT raid which will come into force on Jan 1, saying that tax breaks for private schools are a “luxury our country cannot afford”.

She went on to accuse private schools that their warnings about the impact of the policy have been “nothing short of scaremongering“ and insisted that according to the Government’s analysis, “very few” families will move their children out of fee-paying institutions.

Meanwhile, a family on an average income of £37,340 per adult will be hit with £2,529 of extra taxes in 2025.

Carl Emmerson, the deputy director of the Institute for Fiscal Studies, said: “With the UK tax burden rising to levels that we haven’t previously seen in this country it is no surprise that people will feel squeezed.

“What remains to be seen is how well they feel the money is being spent and how much those households benefit from any improvement in public services.”John O’Connell, the chief executive of the TaxPayers’ Alliance, said: “This is a grim reminder of the way in which the tax system squeezes the middle classes at every opportunity.

“And despite coming to power complaining about the tax burden, this Labour government has decided to betray the public and double down on this shocking raid of household finances.

“Starmer needs to urgently recognise that without significant tax cuts he will bear full responsibility for the continuing economic misery.”