Thousands of middle-class families face paying more than £1million in tax over a lifetime, new research suggests.
An analysis published on Monday by low-tax campaigners has found that the long-term tax bill faced by households with an annual income of over £60,000 now stands at £1.1m, meaning they would have to work the equivalent of 18 years just to pay off the taxman.
It comes after senior Tory MPs on Sunday night turned on Rishi Sunak and hit out at Boris Johnson’s decision to stick with the 1.25 percentage point hike in National Insurance Contributions (NICs) in April, at a time when families are also grappling with soaring energy bills and inflation.
Defending the move in a joint article with Mr Sunak, the Prime Minister insisted that they were “tax-cutting Conservatives” and “Thatcherites” but that the additional tax was needed to fund social care reform and a reduction of NHS backlogs.
In a sign of growing anger within the party over the cost of living crisis, former Cabinet ministers accused the Chancellor of being the “driving” force behind the £12billion a year tax raid.
‘Rishi talks a big story’
They included Sir John Redwood, who told The Telegraph: “I think this was a Sunak imposition. It reads like Sunak rather than Johnson. Sunak is doing the exact opposite of what [Margaret Thatcher] was trying to do, so I don’t know why he was trying to invoke her.”
A second said: “People are really fed up with Rishi. He blames Boris for this but he’s the one driving it. Rishi talks a big story but a lot of people think now he demonstrates the worst possible combination of lots of ambition but little experience.”
Meanwhile, Robert Halfon and Mel Stride, the Tory chairmen of the Commons Education and Treasury committees, said they feared voters would punish the Conservatives at the polls unless other means were found to reduce household bills.
Published by the TaxPayers’ Alliance (TPA), the research also claims that households in the £60,000 income bracket would pay almost £180,000 in NICs over a lifetime even before the levy is hiked after April.
The group has previously suggested that the average worker will pay an additional £430 a year once the increase is implemented.
This is alongside nearly £480,000 in income tax and £190,000 in VAT.
The analysis is based on a household with a gross income of £60,194, paying direct and indirect taxes over the course of 40 working years and 15 years in retirement.
On Sunday night, John O’Connell, chief executive of the group, said: “With the tax burden at a 70 year high, typical families are now tax millionaires. Planned rises, like the national insurance hikes, must be scrapped.”
However, in a bid to draw a line under the row, Mr Johnson and Mr Sunak on Sunday insisted that they would follow through on the “progressive policy”.
“We must clear the Covid backlogs, with our plan for health and social care – and now is the time to stick to that plan,” they wrote in The Sunday Times.
The article, which came amid reports that Mr Johnson was “wobbling” over the hike, has infuriated a number of senior backbenchers, who fear the party could now slump further in the polls.
“What is the point of a Conservative Government if it slaps you in the face with tax increases,” Sir John said. “It is not what we voted for, the manifesto was the other way. They don’t need the money, it’s perverse.”
Echoing his concerns, Mr Stride, former Treasury minister, told this newspaper: ““I think this is the wrong decision. Taxes are heading to their highest level since Clement Attlee and we need to be getting them down where the opportunity arises
“I think there will certainly be political implications if the Government does not, as an alternative, put significant resource-end commitment into tackling energy cost increases for the least well off.”
Mr Halfon told Sky News: “Of course people are struggling with the cost of living, so if they can’t afford to pay their bills that is hardly going to be very positive towards the Government.
“It depends on what the Government does in other measures to try to mitigate against that.”