Budget 2014: Firms demand "roadmap" to future tax cuts

By

Hugo Duncan

|

Experts are asking the Chancellor for a personal tax roadmap

George Osborne should publish a ‘roadmap’ to show how he plans to cut taxes for millions of British workers, according to experts.

A survey of UK businesses by accountancy giant Ernst Young shows 74 per cent want to see the Chancellor bring in changes to income tax in the Budget tomorrow.

Some 45 per cent of those asked believe income tax rates are too high while a further 29 per cent want allowances to be increased to ease the burden on cash-strapped workers.

The findings come amid mounting pressure on the Chancellor to help those being sucked into the 40p rate of tax as well raising the point at which workers start to pay the 20p basic rate.

Experts believe that even if Osborne cannot afford to help now, he should set out clear plans to allow workers to keep more of their hard-earned money in future.

The Chancellor has already set out such a ‘roadmap’ for reducing corporation tax from 28p to 20p.

‘A personal tax roadmap needs to be the next item on the Chancellor’s agenda,’ said Chris Sanger, head of tax policy at Ernst Young.

‘The personal tax system can be extremely complex and is increasingly difficult for taxpayers to navigate.’

Osborne is expected to raise the personal allowance – the amount workers earn before paying 20p tax – to £10,500 having already increased it from £6,475 since the election in 2010.

But the point at which the 40p rate of income tax kicks in has fallen from £43,875 to £41,450 – meaning an extra 1.4million workers are now paying the higher rate.

Roger Bootle, managing director at Capital Economics, said: ‘The Chancellor should introduce forward guidance on personal tax rates. He has laid out forward guidance on corporate tax rates, which has been helpful for companies.

‘If he doesn’t have much money to give away now, he could at least tell people what he proposes to do when he does have some.’

Comments (11)

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campolife42,

Alicante, Spain,

20 minutes ago

Why don’t they ever help pensioners and savers instead of constantly hammering them. They’ve turned back on all the promises they’ve made. LIARS.

exPat,

Almeria, Spain,

2 hours ago

So UK Business DEMAND, you know this how. Maybe when UK Business unlock the Hundreds of Billions of £s the have un-invested, Maybe then they can DEMAND. It is time to so that FAITH the British Public DESERVE from these People. It is a 2 way thing. RESPECT.

Johnski,

Leeds, United Kingdom,

2 hours ago

don’t know where you get your information from, but it’s £31,866 before you pay 40 per cent tax

Johnski,

Leeds, United Kingdom,

2 hours ago

don’t know where you get your information from, but it’s £31,866 before you pay 40 per cent tax

alimac,

Reading,

3 hours ago

Two words; Lib Dems! :((

Paul,

London, United Kingdom,

3 hours ago

Millions of workers on zero hours do not pay income tax but claim tax credits. The real answer needs to be a move from a minimum wage to a living wage.

Phillip,

Hockley, United Kingdom,

3 hours ago

I would like to see him merge tax and national insurance and then just give me the % that i am going to pay on mine and everyones salary. Make things easier for everyone,

pensioner,

thornton lancashire, United Kingdom,

2 hours ago

they won`t do that because then you would realise just how much the goverment takes of your hard earned income plus there are all the other taxes like fuel taxes etc.then you would see that most of your income goes back to the goverment in taxes.

johnwg,

London, United Kingdom,

4 hours ago

Very hard to expect a Chancellor to commit to a “roadmap” within just over a year of a general election – he wants to keep some things under wraps to tempt the electorate during the run-up – or the year-long election campaign as we now have to think of it.

cynical,

London, United Kingdom,

4 hours ago

¿If he doesn¿t have much money to give away now, he could at least tell people what he proposes to do when he does have some.¿… Given the size of the defecit that’s not going to be for a long, long, time.

stanley,

Cheshire,

4 hours ago

Yeah so as the firms can factor it in when giving low pay rises .. More taxpayer money to help private profit

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Budget 2014: Firms demand "roadmap" to future tax cuts