TaxPersonal TaxConservatives propose new tax ‘direction’

Conservatives propose new tax 'direction'

The Conservative Party has unveiled five options to take more than a million people out of the higher tax rate.

Link: Conservatives will make government ‘thinner’

In a five-point consultation paper, one of eight the Tories plan to release over the coming months, shadow chancellor Oliver Letwin said that a ‘change of direction’ was needed to help people on lower incomes and people ‘trapped in top-rate tax‘.

If Letwin was given the go-ahead for the tax plans, the level at which workers begin paying a 40p tax rate would leap from £36,000 to £40,800, while high earners would save up to £800. However, the proposal is estimated to cost £2.6bn and is not policy.

Letwin said: ‘Tony Blair claimed that he had no plans to raise taxes at all. That was all talk. By stealthily raising thresholds more slowly than the increase in earnings, Tony Blair has dragged 4.2m more people into paying income tax, and 1.35m more people into paying top-rate income tax.

‘Part-time workers on the minimum wage are now paying tax, and deputy head teachers are paying top-rate tax.’

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