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Osborne to claim overall cut in tax

George Osborne is set to hail an overall cut in taxes when he delivers his third Budget.

The Chancellor is expected to say that lower-than-expected government spending means he can put a little money back in people's pockets.

Measures will include speeding up progress towards the coalition's pledge of a £10,000 tax-free allowance - with the level potentially topping £9,000 next year.

But he is also set to risk controversy by announcing that the 50p top rate imposed on earnings above £150,000 will be phased out.

Extra revenue will come from a crackdown on stamp duty loopholes, with reports that the levy on house purchases above £2 million is to be increased following Liberal Democrat demands for more taxes on wealth.

There is speculation that up to 20 million people could find themselves better off as a result of the package - although the overall reduction in taxes will be relatively small.

Lib Dem leader Nick Clegg has taken the unusual step of publicly lobbying the Chancellor to go "further and faster" on the tax-free allowance.

But Tory sources insisted David Cameron and Mr Osborne were happy to agree to the significant acceleration, which will leave most taxpayers hundreds of pounds better off. The £10,000 target is now expected to be reached in April 2014 - a year earlier than planned.

Mr Osborne has repeatedly stressed that he will not borrow more to pay for tax cuts. But he is thought to have been given more wriggle room by better-than-predicted financial figures. Extra scope has been found with a new £2 billion reduction in government spending, the details of which have not yet been disclosed.

It is understood that Mr Osborne will set out "ambitious" measures to simplify the tax system, and reassert his determination to push through planning and structural reforms even if they are unpopular.


From Belfast Telegraph