London's skyline is set to dramatically change in the next few years

Britain is now a £1 trillion tax state with the biggest differential between high and low earners in the OECD. Our top 10 per cent face rates comparable to Denmark while middle earners pay less than Americans, except we don’t deliver Scandinavian public services or American entrepreneurship. We’ve stumbled into the worst of all worlds, says John O’Connell

As we begin 2026, Britain has settled into its new role as a £1 trillion tax state with government receipts hitting £1,138bn in 2024-25. Our tax take is nearly 40 per cent of everything the country produces, the highest sustained level since the early 1980s. Having crossed this grim milestone in 2022-23, we might have expected some restraint in tax rises, but as always, ministers seem determined to make things worse.

The real scandal is how we got here. Frozen tax thresholds, extended again until 2031 in November’s Budget, represent the most insidious form of tax rise imaginable. The personal allowance remains stuck at £12,570, where it has been since 2021. Had it risen with inflation, it........

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