Budget 2021: Sunak freezes income tax threshold and hikes corporation tax

3 March 2021, 12:41 | Updated: 3 March 2021, 20:57

Chancellor Rishi Sunak gave a press conference on Wednesday
Chancellor Rishi Sunak gave a press conference on Wednesday. Picture: PA

By Patrick Grafton-Green

By Joe Cook

Chancellor Rishi Sunak has outlined his spending plans for the coming year as the UK faces its most significant economic challenge in decades.

Mr Sunak announced a raft of measures including a freeze to income tax thresholds and a significant rise to corporation tax.

The Tories stated they wouldn't raise taxes to get the country out of the Covid-19 crisis, and on paper they didn't, keeping income tax rates unchanged. However, the measures announced today are likely to put nearly 1m people into a higher tax band and will mean 1.3m earners on the lower scale will have to start paying tax for the first time.

The Office for Budget Responsibility (OBR) said the changes take overall tax take to the highest level since the mid 1960s.

The Chancellor also announced that corporation tax will go up to 25%, but not until 2023.

He later gave a Downing Street press conference, during which he answered questions from the public and the press.

Read more: Sir Keir Starmer accuses Rishi Sunak's Budget of 'papering over the cracks'

Read more: Budget 2021: Key points at a glance

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