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

Inheritance tax is 'unfit for modern society' and should be abolished, says think tank

Personal Tax Inheritance tax is 'unfit for modern society' and should be abolished, says think tank

3w Alia Shoaib, Reporter
Rent-a-room relief – the survey says…

Personal Tax Rent-a-room relief – the survey says…

2m Helen Thornley, ATT Technical Officer
What should the OTS prioritise in its review of inheritance tax?

Personal Tax What should the OTS prioritise in its review of inheritance tax?

4m Alia Shoaib, Reporter
LITRG urges government to consider tax changes in disability work plan

Administration LITRG urges government to consider tax changes in disability work plan

5m Lucy Skoulding, Reporter
HMRC appeal rejected in Tottenham Hotspur case

Administration HMRC appeal rejected in Tottenham Hotspur case

6m 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

7m Alia Shoaib, Reporter
New trading allowance: simplicity, but not as we know it

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

8m Emma Rawson, ATT Technical Officer
Wealthy individuals could circumvent top tax rate rises

Personal Tax Wealthy individuals could circumvent top tax rate rises

9m Alia Shoaib, Reporter