![\"Rachel](\"https:\/\/www.europesays.com\/britain\/wp-content\/uploads\/2026\/04\/rachelreeveschancellor-1.jpeg\")
\t\tWelfare spending now exceeds the amount raised through income tax\t<\/p>\n\t\t\tTuesday 07 April 2026 5:45 am
\n\t\t\t\t\t\u00a0|\u00a0\u00a0Updated:\u00a0<\/p>\n
\t\t\tMonday 06 April 2026 4:55 pm\n\t<\/p>\n
\t\tWelfare spending now exceeds the amount raised through income tax\t<\/p>\n
If it were possible to buy Happy New Tax Year cards you\u2019d surely find them stocked in the \u2018With Sympathy\u2019 section. <\/p>\n
As of yesterday, the state has increased its demands on a host of taxpayers. Dividend tax is up two per cent for basic and higher rate taxpayers, with the latter now hit by a rate of 35.75 per cent. Entrepreneurs looking to sell business assets will also feel the pinch, with the tax rate on any gains up 4 per cent to 18 per cent thanks to the Chancellors changes to various forms of relief. The incentive to invest in venture capital trusts has also been eroded (do we really want to discourage this kind of investment?) while even working from home tax relief has had its day. <\/p>\n
Anyone wanting to put all this behind them and escape for a few days will also find that Air Passenger Duty has also gone up, along with a variety of other costs from TV licences to utilities and council tax. But by far the most pernicious change concerns income tax and the impact of fiscal drag<\/a>. More and more people will pay more and more tax thanks to the frozen thresholds. <\/p>\n Recession is looming, employers are nervous<\/p>\n You can almost hear Rachel Reeves saying \u201cgive me a break, I need the money.\u201d And she certainly does. After all, thanks to Labour\u2019s decision to end the two-child benefit cap<\/a>, nearly 500,000 families with three or more children will now get an average rise in benefits of more than \u00a34,000 a year, while more than 12 million pensioners will receive an almost \u00a3600 boost thanks to the triple lock \u2013 and all this has to be paid for. <\/p>\n But consider this: in the last financial year the government raised \u00a3331bn in income tax while spending \u00a3330bn on welfare. For the first time ever, \u201cthe state is spending more on those not working than it raises from those who are\u201d \u2013 as Annabel Denham<\/a> recently put it. This would be an alarming state of affairs in the best of times, and we are far from the best of times. Recession is looming and businesses are nervous. <\/p>\n Amid all the gathering economic uncertainty, at a time that may prove to be the high point of Labour\u2019s search for growth, the only predictable path this government offers is that taxes and welfare spending will continue to increase.\u00a0<\/p>\n \t\t\t\t\tRead more<\/p>\n