Middle-class families face an £8,000 increase in their tax bills in 2025, analysis by The Telegraph has found.
A raft of Labour tax rises will come into force next year, meaning households will pay thousands more in taxes from their children’s education to council tax.
Rachel Reeves, the Chancellor, who increased taxes by £40 billion when she delivered her maiden Budget, has also refused to rule out further raids next year.
Last night the Institute for Fiscal Studies (IFS) warned that with the tax burden “rising to levels that we haven’t previously seen in this country” it is inevitable that families will feel under pressure.
Andrew Griffith, the shadow business secretary, said: “This level 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.
This includes £3,520 owing to the 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 The Telegraph, 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.”
It came as Sir Keir Starmer was accused of “begging his own Government to create growth” after it emerged that he had written to several quangos and regulators asking for proposals to boost the economy.
A New Year poll also found that Britons believe 2025 will be worse for the country than 2024 by a two-to-one majority in a blow to Sir Keir’s hopes of lifting the nation’s mood.
Half of Britons believe next year will be worse than this year against only 23 per cent who believe it will be better, according to the survey of more than 2,400 people by pollsters More in Common.
A Treasury spokesman said: “We know that many families are feeling the pinch, which is why we protected payslips from higher taxes as well as higher VAT, gave a pay rise to three million workers next year, kept prices down at the pumps by freezing fuel duty, and are not extending the freeze on personal tax thresholds past 2027/28.
“Now we have wiped the slate clean, our Plan for Change is focused on delivering growth that people will feel the impact of, with figures this month showing that wages after inflation have grown at the fastest rate in three years since the election worth an extra £20 a week after inflation.”
