Thursday, August 14, 2014
More help for the low-paid from the Liberal Democrats
The Times reports that the Liberal Democrats are following up on their success in saving millions of low paid workers £800 a year in tax payments, by proposing to look at raising the threshold at which workers begin to pay national insurance contributions.
The paper says that once they have achieved the objective of raising of the income tax threshold to £12,500 the Liberal Democrats will consider the measure as the “next step” in its attempt to reduce the tax burden on low and middle earners. The draft manifesto says that the party will consider “raising the employee national insurance threshold to the income tax threshold, as resources allow”.
The Institute of Fiscal Studies say that aligning the income tax allowance and national insurance thresholds would cut taxes for 1.2 million workers:
Workers start to pay national insurance once they earn more than £8,000. It is charged at 12 per cent for most workers. An increase in the threshold of just £20 a week would, however, cost £2.7 billion.
“That’s why cutting income tax for working people, particularly those on low and middle incomes, is a top Liberal Democrat priority,” Danny Alexander told The Times. “It was on the front page of the 2010 Liberal Democrat manifesto and we have fought to keep it on the agenda at every Budget.
“Now we want to go even further and lift the amount of money people can earn before paying income tax to £12,500. When we’ve reached £12,500 we will seek to raise the level that people start paying employee national insurance.
This is more good news in what is looking to be a very radical manifesto.
The paper says that once they have achieved the objective of raising of the income tax threshold to £12,500 the Liberal Democrats will consider the measure as the “next step” in its attempt to reduce the tax burden on low and middle earners. The draft manifesto says that the party will consider “raising the employee national insurance threshold to the income tax threshold, as resources allow”.
The Institute of Fiscal Studies say that aligning the income tax allowance and national insurance thresholds would cut taxes for 1.2 million workers:
Workers start to pay national insurance once they earn more than £8,000. It is charged at 12 per cent for most workers. An increase in the threshold of just £20 a week would, however, cost £2.7 billion.
“That’s why cutting income tax for working people, particularly those on low and middle incomes, is a top Liberal Democrat priority,” Danny Alexander told The Times. “It was on the front page of the 2010 Liberal Democrat manifesto and we have fought to keep it on the agenda at every Budget.
“Now we want to go even further and lift the amount of money people can earn before paying income tax to £12,500. When we’ve reached £12,500 we will seek to raise the level that people start paying employee national insurance.
This is more good news in what is looking to be a very radical manifesto.
