Income tax threshold
Deputy Prime Minister Nick Clegg has called on the Government to go further and act faster in delivering the full £10,000 personal allowance.
The Liberal Democrats vowed to raise the income tax threshold to £10,000 at the last election, and the coalition agreed to implement the policy during this Parliament, but the new allowance has not yet come into play.
In a speech to the Resolution Foundation in London, Clegg said ‘the UK Tax system cannot go on like this’. He believes that the move would benefit the ‘squeezed’ middle – the working mums and the young couples were examples that he gave.
He said: “Whether you call them the ‘squeezed middle’, ‘hard-working families’, or, as I have, ‘alarm clock Britain’, cutting income tax is one of the most direct tools we have to ease the burden on low and middle earners. The people whose incomes are too high to qualify for welfare benefits, but too low to provide any real financial security.”
According to Clegg, the increased personal allowance would mean paying £700 less income tax each year for millions of basic rate taxpayers.