PM urged to consider new income tax cut for workers
18 Nov 2013
The Deputy Prime Minister Nick Clegg is urging his coalition partners to ‘reward workers’ by raising the income tax threshold by a further £500.
Speaking to the BBC, the Liberal Democrat leader outlined his plan to increase the personal income tax allowance to £10,500 before the general election in May 2015.
Since taking office, the coalition Government has repeatedly raised the income tax threshold in order to fulfil the Lib Dems’ pledge to increase the personal allowance to £10,000.
The personal allowance is due to reach £10,000 in 2014/15, but Nick Clegg now wants to increase this figure by an additional £500 as a bonus for workers.
‘As the recovery is finally taking hold I think it is very important that as many people as possible feel that they are benefiting from it. That's why I call it a workers' bonus,’ he said. ‘Of course, I need to persuade my Conservative coalition partners.’
Raising the income tax threshold to £10,500 would result in a £100 saving for around 24 million people paying basic rate tax at 20%. It is thought that a further 500,000 taxpayers would be taken out of paying income tax altogether.
Experts say the move would cost the Treasury around £1 billion.
The Conservatives said they would consider the plan, but added that any tax cut would need to be ‘paid for’.