No rise in income tax, national insurance, or VAT, Rishi Sunak confirms

But he added: “Instead, our first step is to freeze personal tax thresholds.”

The Chancellor said: “We will of course deliver our promise to increase it again next year to £12,570, but we will then keep it at this more generous level until April 2026.

“The higher rate threshold will similarly be increased next year, to £50,270, and will then also remain at that level for the same period.”

Rishi Sunak also told MPs: “Nobody’s take home pay will be less than it is now, as a result of this policy.

“But I want to be clear with all members that this policy does remove the incremental benefit created had thresholds continued to increase with inflation.

“We are not hiding it, I am here, explaining it to the House and it is in the Budget document in black and white. It is a tax policy that is progressive and fair.”

The Chancellor said he did not believe it would be right to increase the rates of tax on working people, telling MPs: “I believe our approach, while bold, is compatible with our duty as a fiscally responsible and business friendly government.

“This is the right choice and I’m confident it will command public assent.”

Corporation tax

Rishi Sunak said the rate of corporation tax paid on company profits will increase to 25% in 2023.

He told MPs: “Even after this change the UK will still have the lowest corporation tax rate in the G7 – lower than the United States, Canada, Italy, Japan, Germany and France.”

He added: “First, this new higher rate won’t take effect until April 2023, well after the point when the OBR expect the economy to have recovered. And even then, because corporation tax is only charged on profits, any struggling businesses will, by definition, be unaffected.

“Second, I’m protecting small businesses with profits of £50,000 or less, by creating a small profits rate, maintained at the current rate of 19%. This means around 70% of companies – 1.4 million businesses – will be completely unaffected.”