The IFS claims £2 will be taken because of tax and benefit threshold pauses for every £1 gained through the government's personal tax cuts.
"Stealthy" freezes to tax and welfare thresholds will outweigh any benefits people will get from the government's plan to cut taxes, according to economists.
Chancellor Kwasi Kwarteng announced a raft of measures in his mini-budget last month, including cutting the basic rate of income tax by 1p and reversing the increase to National Insurance, brought in earlier this year to pay for health and social care. But the Institute for Fiscal Studies said the ongoing four-year pause on raising the amount people earn before they pay tax, as well as long term freezes on when people move to higher tax brackets, meant the government was"giving with one hand and taking with the other".The group also warned a nine-year freeze on when the taper kicks in for child benefit was hitting households amid the cost of living crisis.
The IFS concluded that by 2025-26, the freezes will take away £2 for every £1 given to households through the personal tax cuts outlined by the government. Tom Waters, a senior research economist at the IFS, said:"Practically every part of the tax and benefit system contains allowances, amounts or thresholds that are frozen, often indefinitely.
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