This year’s Spring Budget is as noteworthy for what wasn’t announced, as for what was. Having been set to be a big one given the state of the public finances, Chancellor Rishi Sunak has effectively raised taxes via the backdoor thanks to a series of stealth tax allowance changes.

Much debate was made around the contents of the Budget and whether Sunak would raise taxes in order to pay the extraordinary debt accrued during the coronavirus crisis – some £400 billion in extra government borrowing. But in the event the Chancellor only opted for one upfront tax rise – to corporation tax. The levy on company profits will be raised from 19% to 25% from 2023. Businesses with profits of £50,000 or less will not be liable for any increases and above that a taper will be in effect – so only firms with profits of £250,000 or more will be hit with the full 25% rate.

The Treasury has, however, opted for a raft of tax hikes by the backdoor – by freezing a series of allowances, including income tax, inheritance tax, capital gains tax and the lifetime allowance. By freezing these allowances, the Government isn’t presenting an ‘in your face’ tax rise. Instead, it is reducing the benefit of tax-free allowances as your income and savings grow over time.

Here are the key numbers and implications for each:

Income tax allowance – This has increased to £12,570 for the tax-free allowance and higher rate payer threshold held at £50,000, but rates will then be kept at that level until 2026.

Inheritance tax allowance – frozen at £325,000. This allowance hasn’t changed for years, although extra nil rate bands relating to family homes have been introduced over time. But every year that the rate has been held at the same rate has seen more estates grow enough in value to be liable to then pay tax.

Capital gains tax (CGT) allowance – frozen at £12,300. Many expected much more sweeping changes to CGT after the Chancellor commissioned a review, but instead the allowance has just been held, a much less ambitious change.

Lifetime allowance (LTA) – frozen at £1,073,100. This is clearly relevant for those with larger wealth and dictates how much savers can put into pensions without incurring extra tax charges. Those who breach the LTA face a tax of 55% on any lump sum withdrawals above the threshold, or 25% if you take an income.

What you can do

There are various ways to mitigate the worst of these tax freezes. The effects won’t be immediately felt – this means it is possible to plan financially to minimise the extra tax burden. This can include apportioning more to other, unaffected, areas such as ISAs, spreading allowances between yourself and a spouse, making extra gifts out of your estate, or sacrificing income in to pensions to avoid higher tax bands.

If you are concerned by any of these tax changes don’t hesitate to get in touch with your financial adviser to discuss your options.