An additional one million people are forecast to pay income tax in 2026-27 compared with 2025-26 as frozen tax thresholds continue to increase the tax burden, according to research from the TaxPayers' Alliance.

The group's calculations showed that an extra 500,000 people will pay the basic rate, 410,000 more the higher rate and 70,000 more the additional rate, while the number of over 65s in pension paying income tax is expected to rise by 630,000 to 10.2 million.

Total income tax receipts are forecast to reach £347bn in 2026-27, with the average taxpayer paying £640 more than in 2024-25 and £1,040 more than in 2023-24.

London and the South East are expected to have the highest proportion of higher-rate taxpayers, with 16.2% of taxpayers in the North West also paying the higher rate.

The alliance called on Prime Minister Andy Burnham, who said the freezing of the personal allowance was the issue voters raised with him most during the Makerfield by-election campaign, to end fiscal drag by unfreezing tax thresholds.

John O’Connell, chief executive of the TPA, said: "A million more Brits are being caught in the taxman’s net by stealth. Freezing thresholds lets ministers rake in billions without admitting they have raised taxes, hitting workers, pensioners and families across the country.

"If Andy Burnham really wants to give hard-working taxpayers breathing space, he should end fiscal drag and unfreeze tax thresholds."

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