Cameron hints at raising 40p threshold

Cameron hints at raising 40p threshold

David Cameron says he recognises the problem of paying the 40p rate "when people are not earning a lot of money"

THE PRIME MINISTER is considering raising the threshold for the 40% tax band, claiming to “understand” the problem of it kicking in “when people are not earning a lot of money”.

In a speech made to workers at a water company in Warrington, he said people “who don’t see themselves as fundamentally wealthy” are paying the 40p rate, which applies to those earning £41,865 or more per year.

Despite claiming he “understood” the problem, Cameron insisted he could not make any promises, the Guardian reports.

The most recent official annual figures showed the average salary for men in full time employment was £29,300, while it was £23,600 for women, according to the Office for National Statistics.

More than two million extra people will start paying the higher rate of tax over the course of the parliament, according to the Institute of Fiscal Studies – a process known fiscal drag, because the rate does not rise, but salaries rise with wage inflation.

Cameron said: “I understand the problem with the 40p rate kicking in when people are not earning a lot of money, and I have to look very carefully at the books before I can make any promises about it.”

Share

Subscribe to get your daily business insights

Resources & Whitepapers

Why Professional Services Firms Should Ditch Folders and Embrace Metadata
Professional Services

Why Professional Services Firms Should Ditch Folders and Embrace Metadata

3y

Why Professional Services Firms Should Ditch Folde...

In the past decade, the professional services industry has transformed significantly. Digital disruptions, increased competition, and changing market ...

View resource
2 Vital keys to Remaining Competitive for Professional Services Firms

2 Vital keys to Remaining Competitive for Professional Services Firms

3y

2 Vital keys to Remaining Competitive for Professi...

In recent months, professional services firms are facing more pressure than ever to deliver value to clients. Often, clients look at the firms own inf...

View resource
Turn Accounts Payable into a value-engine
Accounting Firms

Turn Accounts Payable into a value-engine

3y

Turn Accounts Payable into a value-engine

In a world of instant results and automated workloads, the potential for AP to drive insights and transform results is enormous. But, if you’re still ...

View resource
Digital Links: A guide to MTD in 2021
Making Tax Digital

Digital Links: A guide to MTD in 2021

3y

Digital Links: A guide to MTD in 2021

The first phase of Making Tax Digital (MTD) saw the requirement for the digital submission of the VAT Return using compliant software. That’s now behi...

View resource