£1.3MILLION: That’s the staggering quantity of tax paid by the common UK household over a lifetime… and nonetheless Reeves is not glad

The average family will pay nearly £1.3million in tax over a lifetime – including almost £600,000 in income tax – as the Chancellor comes for more, research shows.

And the real figure is likely to be even greater as the most recent data does not include major tax increases under Labour, the TaxPayers’ Alliance said.

It comes ahead of the Budget later this month in which Rachel Reeves is widely expected to push up income tax yet further.

Any increase would be the first to the basic rate since 1975 and would breach Labour’s key manifesto commitment of not taxing working people more.

But reports yesterday suggested that Ms Reeves could finally define ‘working people’ as those earning less than £46,000 a year.

Keir Starmer has struggled to outline the term, suggesting it encompasses people who go out to earn a living but can’t just write a cheque to get out of difficulty.

The Chancellor is under pressure to fill a hole in the public finances estimated to be more than £40billion with little room to cut public spending on November 26.

Reports in The Mail on Sunday suggest she has identified who to tax more by labelling anyone earning £46,000 or more as ‘wealthy’.

The Chancellor is under pressure to fill a hole in the public finances estimated to be more than £40billion

By using salaries to define the term, the Treasury could ensure that increases in income tax or National Insurance (NI) will only kick in at that figure.

This would cover the top-third of earners – or 7.2million Britons – including HGV drivers, teachers and head chefs at the Wagamama restaurant chain.

They could face potential levy rises on pension perks worth £4billion and a charge to leave the UK for tax havens, which could raise £2billion.

The Chancellor could also impose a ‘mansion tax’ on properties worth £2million or more, increase capital gains and bump up council tax on the most expensive properties.

When asked previously if higher taxes on the wealthy would feature in her Budget, Ms Reeves said: ‘That will be part of the story.’

There have been suggestions that the Treasury is looking seriously at a proposal by the Resolution Foundation think-tank to increase income tax by 2p while reducing NI by the same amount. This would allow Ms Reeves to argue she had not put up income tax for working people while raising money from pensioners, landlords and some self-employed workers.

Reports over the weekend reinforce the idea that she will increase taxes in order to protect the NHS’ £53billion of extra funding.

But the TaxPayers’ Alliance research shows that households are already shouldering a tax burden which is approaching record levels. Across all households, the average lifetime tax contribution has almost doubled in real terms since 1977 – with the average household now needing to work for more than 19 years just to pay their lifetime tax bill.

Rachel Reeves could impose a ‘mansion tax’ on properties worth £2million or more in the upcoming budget

And the most recent figures, from between 2022 and 2023, fail to capture the true picture as they do not take into account recent tax changes such as the Tories’ National Insurance cuts last year or Labour’s first budget in October 2024 – which saw £40billion of tax hikes.

The research defines ‘a lifetime’ as 45 working years from the age of 21 through to the State Pension at 66, as well as 15 years of retirement.

John O’Connell, chief executive of the TaxPayers’ Alliance, called on Ms Reeves to rule out further increases to the already heavy tax burden.

‘These figures are a damning indictment of consecutive governments failing to get spending under control while demanding taxpayers hand over more and more to fund an ever-expanding state,’ he said.

‘Most households are now tax-millionaires, but rather than look at ways to reduce the tax burden the Chancellor is widely expected to launch another devastating raid on household budgets.

‘Rachel Reeves should be ruling out tax rises and focus her fiscal policy on significant spending cuts to reduce the pressures on hard-working taxpayers.’

A Treasury spokesman said: ‘We do not comment on speculation around tax changes outside of fiscal events.’