The Daily Telegraph - Saturday - Money
Readers tell Hunt: raise tax thresholds to win election
The Chancellor’s spring Budget on Wednesday is one of the most significant political moments before the next election, expected later this year.
Jeremy Hunt has already warned that tax cuts will not be as large as those announced in November. Yet Telegraph readers point out that the Conservatives’ freeze on various thresholds amounts to a big stealth tax rise. Readers have told us what they want to see in the March Budget, with many arguing that a tax giveaway is the only way to take the fight to Labour.
Changes to income tax rates and taxfree allowances are among the most important changes readers want to see.
For Roger B, come April 6, he would have been paying taxes for 57 years. “For each year that goes by, despite now being retired, I get dragged back yet further by a freezing of the tax bands, or by inflation as my standard of living continues to drop.”
Similarly, Joe Jones wants to see tax cuts to support the middle and high earners. He says: “The UK is becoming too expensive for most of us and when you compare a typical basket of goods [with] our Western allies, I am flabbergasted at how expensive they now are.
“Unless things change dramatically over the next five years, I will be looking to retire in another country.”
An anonymous reader supports the raising of income tax thresholds that he believes is the popular and fair tax cut that benefits all the working population.
He says: “That will stimulate growth and probably win them the election. Hopefully, they will develop a bit of common sense moving forward and not subject us to another five years of nothingness. What happened to all the 2019 growth pledges? Wrecked by the Treasury with gutless politicians unable and too weak to put them in their place.”
Reader Bryan Tomlinson also wants income tax thresholds to rise, thinking it ridiculous that pensioners will soon start paying tax on the basic pension.
Peter Griffiths wants the personal allowance to be raised to £15,000, “to help the foundations of the great British economy: the cleaners and the carers”.
He continues: “I’m fed up with talk, we need government action.”
Terry Idiens wants to see the threshold increase to £20,000, “to take pensioners and low income paid families out of paying tax.”
George Crozier, of the Chartered Institute of Taxation, says: “Freezing income tax thresholds has been a huge revenue raiser for the Government.
“In the next tax year it’s expected to bring in an extra £23bn for the Government, compared to what would have been raised if thresholds had increased in line with inflation. By 2027, when the policy is set to run to, forecasts are it will be bringing in an extra £ 34bn a year. National Insurance threshold freezes are expected to add an extra £ 9bn to that. All this tells us that it would be very expensive for the Government to reverse this policy.”
However, Mr Crozier says there was “potentially” good news in rumours there would be some kind of tax cut. A 1p cut to the basic rate of tax would cost the Treasury £6bn, while raising the personal allowance by £1,000 would cost a similar amount, he said.
Other readers call on the Chancellor to reduce what they deem wasteful and unnecessary spending. Reader Jay Ro is one of many who bemoan the lack of “fiscal headroom” given “the ridiculous expenditure on hotels for illegals and the bloated welfare state”.
Another reader, Martin Whapshott, argues: “Immigrants should have no entitlement to public services including free healthcare, benefits, housing or education until they have paid into the system for at least five years.”
Phil Burton questions how he can deny millions tax cuts while letting over 1m people settle here a year – people with no history of paying taxes, many of whom never will pay them.
Others turn their attention to the “bloated” public sector. Reader Andrew Paul calls for the removal of all final salary pensions, including the Civil Service, and reduction of funding to all ancillary government quangos.
He also believes we should “stop giving subsidies to the likes of wind farm companies, renewable energy companies and the EV industry.”
Christopher Powell believes that spending cuts on everything other than education are necessary.
Readers continue to support this newspaper’s campaign to abolish inheritance tax.
Reader Lou Bath highlights how the threshold “has not been increased in the 14 years the ‘fake’ Tories have been in power. Now just about every home in the South East is worth more than the threshold, yet people like the Duke of Westminster can inherit £8bn and not pay a penny in inheritance tax”.
Caferino Fernandez thinks the threshold should double to £750,000.
Finally, Johan Lundblad points out how Sweden did away with it many years ago with, on balance, a positive outcome for the economy and the taxpayers. People no longer had to move out of Sweden to avoid the tax and instead continued to pay taxes and injected the money into the economy.
David Sturrock, a senior research economist at the Institute for Fiscal Studies, wants to limit or cut off some of the many IHT loopholes. He says “Business, agricultural and pension assets can be passed on tax-free. This is unfair, distorts decisions and opens up channels for tax avoidance. Curtailing these would raise revenues which could be used to raise the inheritance tax threshold, cut the tax rate or fund public spending or other tax cuts.”