Tax burden will hit £1tn for first time, warns OBR

The Office for Budget Responsibility has warned that the UK tax burden is set to hit £1tn for the first time. It also said house prices would fall by 9%, with mortgage rates expected to stay at 5% until 2028. The independent fiscal watchdog said the level of tax as a proportion of GDP would rise from 33.1% in 2019 to 37.1% in 2027-28. Tax receipts will hit £1tn for the first time this year, rather than next year as had been anticipated. This is partly due to the decision to raise the windfall tax on oil and gas companies from 25% to 35% and extend it to electricity generators, but also partly due to the freezing of thresholds catching more people as inflation raises costs. The OBR said record levels of inflation and year-long recession would bring about the biggest fall in living standards since records began in 1956. Over the next two years, living standards are forecast to fall by a combined 7.1%, wiping out a decade of gains and bringing them to their lowest level since 2013.   To send feedback, e-mail piers.wehner@eg.co.uk or tweet @PiersWehner or @EGPropertyNews