Budget: Osborne to lift tax allowances to help low paid

http://news.bbc.co.uk/1/hi/politics/10371590.stm

The rate at which people start paying tax will rise by £1,000 in the Budget but ministers face likely criticism over tax rises and cuts elsewhere.

Nearly 900,000 people earning less than a £7,475 will pay no tax under plans set to be announced by Chancellor George Osborne on Tuesday.

Mr Osborne will say his deficit-cutting package will be "tough but fair" and that the better-off will pay more.

But Labour say the poorest will be hit and cuts are ideologically driven.

Mr Osborne will deliver his and the coalition government's first Budget at 1230 BST (1130 GMT), fulfilling the Conservatives' pre-election pledge to hold a Budget within 50 days of coming to office.

Mr Osborne has said the Budget will set out "tough" but necessary plans to bring down borrowing over the next four years and how this will be divided up between spending cuts and tax rises.

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I think this is just Osborne trying to slightly soften the blow of the awful news that will be featured in the budget tomorrow.

Was your prediction correct?

I am not British, so what kind of cuts did they propose? What changes to taxes? And what do you think of the proposed budget?

titus said:

Was your prediction correct?

I am not British, so what kind of cuts did they propose? What changes to taxes? And what do you think of the proposed budget?

Click to expand...

Yeah, it was pretty bad news. VAT is going up from 17.5% to 20%, which will increase prices in general. There's also pay freezes (ie pay cuts, due to inflation) on all public sector workers. It will become clearer what cuts the government are going to make in the coming months. Interestingly, alcohol, fuel and tobacco are not going to increase in taxes, which is pretty stupid, as they are clear-cut sources of revenue for the government and can easily make the government millions.

I lived in England for a few months in '07 and the one thing it was hardest for me to deal with was the taxes. Not only did I think the taxes were so high that they were detrimental, but every time I read the paper it had politicians saying that the way to solve all their problems was to tax more things. (The government thinks people are eating too much salt? Then raise the taxes on salt! A tax for watching television?)

I actually hired a guy that had to quit two weeks later because the taxes were so high for a second job that it wasn't worth him working. Taxing in a way that it discourages people from working is not a good system.

In my 20 years of managing in the US I never had an employee ask me to break the law by working under the table. In my short time in London I had around 6 or 7 people ask to work under the table, including my executive chef. The system seems to me, from my limited experience, to be broken and counterproductive, and this new "fix" can only make things worse.

20% VAT? I can't even imagine.