TaxPersonal TaxE&Y warns income tax changes will leave holes

E&Y warns income tax changes will leave holes

Adviser to Big Four firm's ITEM club warns rumoured income tax threshold rises for low income workers will leave fiscal gaps that need to be plugged

The senior economic adviser to Ernst & Young’s ITEM club has warned
fiscal gaps opened up by income tax breaks for low income families will need to
be addresed.

Hetal Mehta said investors would want assurances that the numbers added up
after
the
deal agreed between the Conservatives and Liberal Democrats
which is said to
feature a rise in the tax-paying threshold for low earners.

“Going forward, investors will seek reassurance that there is commitment to a
significant reduction in the deficit,” Mehta said.

“While the intention to begin fiscal tightening this year has been agreed,
the rumoured increase in the income tax personal allowance will leave a hole in
the plans that will need to filled by even greater spending cuts or tax rises
elsewhere.”

The emergency Budget which has to be held within 50 days must go into detail
on the proposed public spending cuts, Mehta said.

“Any hint that all measures are not fully costed will lead to upward pressure
on gilt yields and put sterling under further stress,” Mehta added.

Related Articles

HMRC appeal rejected in Tottenham Hotspur case

Administration HMRC appeal rejected in Tottenham Hotspur case

2w Emma Smith, Managing Editor
HMRC urged to clarify impact of income allowances on Self-Assessments

Personal Tax HMRC urged to clarify impact of income allowances on Self-Assessments

2m Alia Shoaib, Reporter
New trading allowance: simplicity, but not as we know it

Administration New trading allowance: simplicity, but not as we know it

2m Emma Rawson, ATT Technical Officer
Wealthy individuals could circumvent top tax rate rises

Personal Tax Wealthy individuals could circumvent top tax rate rises

4m Alia Shoaib, Reporter
Italy grants first successful non-dom status application to former UK non-dom

Personal Tax Italy grants first successful non-dom status application to former UK non-dom

4m Emma Smith, Managing Editor
Industry reaction: Taylor Review does not go far enough in addressing tax issues

Legal Industry reaction: Taylor Review does not go far enough in addressing tax issues

5m Alia Shoaib, Reporter
Does the Taylor Review sufficiently address the gig economy?

Corporate Tax Does the Taylor Review sufficiently address the gig economy?

5m Alia Shoaib, Reporter
HMRC tax evasion assistance requests double in five years

Corporate Tax HMRC tax evasion assistance requests double in five years

5m Emma Smith, Managing Editor