British Prime Minister David Cameron Monday announced that the government will raise the income tax free allowance to 12,500 pounds (or 18,600 U.S. dollars) by 2020, a fresh step to please voters as the general election is approaching.
Also from today, or April 6, Briton’s income tax personal allowance has been increased to 10,600 pounds from the 10,000 pounds of the previous fiscal year 2014-15. And according to the government’s budget report released last month, the personal allowance will be gradually increased to 10,800 pounds and 11,000 pounds in 2016-17 and 2017-18 respectively.
Cameron, who is also the leader of the Conservative Party, said 94 percent of working households are better off under the new tax and benefit changes announced Monday.
The tax cut plan “will bring another one million people out of tax. It will meet a tax cut for 30 million hard working tax payers, with a typical basic tax payer saving around 1,200 pounds,” he said in a speech in Bristol, England.
Meanwhile, the threshold of the 40 percent tax payer will also be raised up to 50,000 pounds a year from the current 42,385 pounds. And anyone who works 30 hours a week at the minimum wage will not have to pay any tax at all from now on, announced Cameron.
On the same day, however, Ed Balls, the shadow Chancellor of Exchequer of Britain’s Labor Party, blasted the Conservative tax cuts, by claiming that the result will lead to an average of 1,100 pounds worse off for every British family than in 2020.
Balls outlined Labor’s tax pledges. He said: “No rise in VAT, no rise in National Insurance, no rise in the basic and higher rates of income tax, but we will have a lower starting rate of income tax at 10p and we’ll put the top rate up to 50 percent for people earning 150,000 pounds.”
Britain is to hold its next general election on May 7. A party needs to win at least 326 of all 650 seats in the House of Commons, the parliament’s lower house, to form a majority government. (1 pound = 1.49 U.S. dollars) Enditem