Wednesday, 6 February 2013

2p on income tax?

OK brace yourselves for the tax rises of 2015...

Will it be income tax, will it be VAT? Will it be a combination of different taxes, including more on house sales, inheritance or National Insurance?

Today's Green Budget from the respected Institute for Fiscal Studies points out that by the 2014-15 financial year the Chancellor will be borrowing £64bn more than originally planned to cover his spending.

And that's factoring in all the spending cuts, welfare reductions and tax changes which the government has brought in since 2010.

The borrowing is continuing while the government tries to heave the economy out of its rut and stagger towards the next election.

The point is, what then?

The IFS says:

Over the last 30 years tax rises announced in the year after a general election have averaged £7.5bn.

Considering this trend, and in the context of the current fiscal situation, further tax rises following the next election would not be surprising.

So, maybe an emergency budget after the June, 2015 election, and tuppence on income tax - raising £10bn a year.

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