Tax Rebates & Refunds

Coalition government to increase tax rate

June 28, 2010
Posted in Budget 2010, Income Tax — Written by Jennifer

A recent law passed by the coalition Government is all set to affect tax payers who are already bearing the brunt of a high tax rate.

This move has been taken to help lower class families. According to this new law passed by the coalition Government, the income tax threshold will be increased from £6,475 to £10,000. This move is expected to benefit all the poorer families. This move is set to affect the tax payers in the higher tax bracket.

According to accountants at Grant Thornton, the number of people in the high tax rate bracket will increase considerably. To be precise, this number will increase from 3.1 million to 6.03 million. This increase will be seen over the next five years. Chancellor, George Osborne, had announced earlier that personal allowance will increase from £1,000 to £7,475. The Coalition Government wants to increase the personal allowance even more. This law will be passed so that people do not have to pay income tax on their first £10,000.

Osborne has assured that higher earners will not be compelled to shell out more in order to compensate for cuts. According to Mike Warburton, three million people will have to pay a higher rate of tax. How UK citizens deal with this increase will be seen in the coming months.

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