Stealth Tax Calculator UK 2026/27
Calculate how frozen tax thresholds have increased your tax burden. See the real impact of fiscal drag on your income since 2021.
Frozen Thresholds (2021-2028)
If Inflation-Adjusted
Extra Tax Due to Frozen Thresholds
£629
per year
Tax You Pay (Frozen)
£7,486
If Thresholds Rose
£6,857
Calculation Methodology
Compares current tax liability using frozen thresholds against what tax would be if thresholds had risen with ~25% cumulative inflation since April 2021. Uses actual 2026/27 rates and frozen thresholds.
Official Sources
Important: Results are estimates based on standard HMRC rules. Your actual tax may differ based on your specific tax code, benefits, or HMRC adjustments. Always verify with your employer or a qualified accountant.
Frequently Asked Questions
What is stealth tax or fiscal drag?
Stealth tax occurs when tax thresholds are frozen while wages rise with inflation. You end up paying more tax not because rates increased, but because you've been pushed into higher tax brackets in real terms. The government gains extra revenue without officially raising taxes.
How long have UK tax thresholds been frozen?
The Personal Allowance (£12,570) and Higher Rate threshold (£50,270) have been frozen since April 2021. Originally planned to end in 2026, the freeze has been extended to 2028. With cumulative inflation of around 25%, this represents a significant real-terms cut.
How much extra tax am I paying due to frozen thresholds?
If your salary has risen with inflation since 2021, you could be paying hundreds or thousands more in tax than you would if thresholds had kept pace. For example, someone earning £50,000 now who earned £40,000 in 2021 is likely paying £1,500-2,000+ more in 'stealth tax'.
Have more people become higher rate taxpayers?
Yes, the OBR estimates millions more workers have become higher rate (40%) taxpayers since 2021 due to frozen thresholds. The threshold would be around £63,000 if it had risen with inflation, but remains at £50,270.
Will thresholds be unfrozen soon?
The current plan is for thresholds to remain frozen until April 2028. After that, they may rise with inflation again, but this depends on government policy. Some economists call for thresholds to be permanently linked to inflation to prevent future fiscal drag.