“Instead of being thanked in any way, we are being made to take a heavier burden. He said: “These were years when we could have met life-long friends, future partners, and made unforgettable memories. These changes to the taxation system are expected to impact graduates and low earners particularly hard, as the tax increases will make up a bigger proportion of their annual salaries.Īlex Adams, 22, who graduated this year branded the proposed changes “a slap in the face” for students and graduates, especially on account of how they were affected during the pandemic. The Chancellor is predicted to announce plans to lower the student loan repayment threshold from £27,295 to £23,000.Ĭurrently, students pay back 9% of earnings over £27,295 for a period of thirty years, although under the new plans, they will be expected to pay 9% of earnings over £23,000 for a period of forty years. These measures are expected to be joined by one directly affecting students and graduates. This effectively means the threshold decreases in real terms.Īny earnings between £12,570 and £37,700 are currently taxed at 20%.Īdditionally, in September this year Prime Minister Boris Johnson announced that from April, the national insurance rate of 12% paid on earnings over £9,568 would be increased to 13.5% to raise additional funds for a health and social care levy designed to help the NHS and social care sector rebound after the pandemic.Įmployer contributions to National Insurance are also expected to rise by 1.25%. In March this year, Mr Sunak announced that the income tax personal allowance threshold, the threshold for earnings below which you don’t have to pay any tax, would be frozen at £12,570 until 2026, instead of rising in line with inflation. READ MORE: 'I pay £9k a year for university and I can't even get into all the rooms'
This is due to changes in the way graduates will be asked to pay back student loans, and the rates at which wage earners will have to pay income tax and national insurance from April next year.
In changes due to be announced today (October 27) by Chancellor Rishi Sunak, it is expected that students and graduates will be forced to pay as much as a 50% tax rate on earnings over £23,000. Students and graduates have slammed a predicted tax increase on young people as a slap in the face.
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