Chancellor ready to speed tax threshold tactics

0
Have your say

THE Government will accelerate plans to lift 300,000 of the region’s lowest-paid workers out of tax and cut the income tax of 1.7 million people across Yorkshire when the Chancellor unveils his 2012 budget today.

Liberal Democrat leader Nick Clegg is understood to have won the agreement of George Osborne that the Coalition should move “further and faster” toward its goal of raising the minimum threshold at which most people start paying income tax to £10,000.

The Treasury is now set to introduce the new £10,000 threshold in 2014, a year earlier than had been planned, as a concession to Mr Clegg after the Lib Dems gave way to the Chancellor’s desire to cut the 50p tax for the UK’s highest earners.

The minimum threshold is already due to be lifted to £8,105 from next month under previously-announced measures, giving a £130 tax break to low and middle-income workers across the UK.

Sources suggested Mr Osborne will announce an increase to more than £9,000 for April 2013, paving the way for the £10,000 threshold to be met in April 2014.

The measure would be the single-largest item of expenditure in the Budget and represents a significant success for a flagship Lib Dem policy.

New figures today reveal an estimated 301,000 low-pay workers in Yorkshire would no longer pay any tax once the £10,000 commitment has been met, and a further 1.68 million people across the region on low to middle incomes will each receive a tax cut each month.

Speaking in the Commons yesterday, Mr Clegg defended his party against Labour attacks that it has “rolled over” on the 50p top rate.

“The priority for me and for the whole Coalition Government will be to provide real help to people on middle and low incomes,” he said. “Whatever changes there are to this bit of the tax system or that bit of the tax system, we believe the wealthy should pay more – because the broadest shoulders should bear the heaviest burden.”

Hopes were also growing last night that Leeds-Bradford will be chosen as one of the Government’s 10 new “super-connected cities” and receive public funding to extend superfast broadband networks.

The UK’s four national capitals have already been told they will definitely be amongst the 10, meaning other regional cities are fighting it out for the remaining slots. Leeds and Bradford’s decision to combine their bid is understood to have been well received at Whitehall, and city leaders hope they will get the nod from Mr Osborne today.

The Chancellor will also use his speech to unveil plans issue annual personal statements to every taxpayer in the country from 2014-15, detailing how their money is being spent.

Specimen statements prepared by the Treasury show someone on £25,200-a-year sees £5,700 of their income go to the Exchequer in direct taxation.

Of that, the biggest slice goes on welfare which accounts for £1,900, followed by £994 for health and £743 for education.