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21/03/2012
Tax Allowance Set To Rise
It is expected that the chancellor George Osborne will raise the amount a person can earn before they start paying tax as part of the upcoming budget.
A cut of the 50p tax rate to 45p will also be announced but will not come into force until 2013.
The government has answered criticism of this cut by saying it is not giving a net tax cut to the rich because money will be clawed back by reducing tax avoidance and raising property taxes.
The threshold at which anyone pays income tax is set to increase to over £9,000 next year, which would leave the average standard rate taxpayer £305 a year better off.
This is the second substantial rise in the threshold following a lift of £1000 in 2011.
It is unclear how the measure will be paid for and when it will come into force, although it is expected that a change to the higher rate threshold will mean higher earners will not gain from the change. Economists have also warned that raising the threshold will cost billions.
The full budget will be delivered later today.
(H/GK)
A cut of the 50p tax rate to 45p will also be announced but will not come into force until 2013.
The government has answered criticism of this cut by saying it is not giving a net tax cut to the rich because money will be clawed back by reducing tax avoidance and raising property taxes.
The threshold at which anyone pays income tax is set to increase to over £9,000 next year, which would leave the average standard rate taxpayer £305 a year better off.
This is the second substantial rise in the threshold following a lift of £1000 in 2011.
It is unclear how the measure will be paid for and when it will come into force, although it is expected that a change to the higher rate threshold will mean higher earners will not gain from the change. Economists have also warned that raising the threshold will cost billions.
The full budget will be delivered later today.
(H/GK)
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