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Accountants advise Chancellor to increase tax thresholds during upcoming review.

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TLDR:

Accountants are urging the Chancellor to raise tax thresholds rather than cut national insurance in the upcoming budget. Frozen tax thresholds are increasing the tax burden for many taxpayers, and it is suggested that increasing basic rate bands, personal allowances, or personal savings allowances would provide more relief. The current freeze on thresholds is leading to a higher tax burden and impacting taxpayers as salaries rise. The Chancellor should consider aligning tax thresholds with inflation to provide more relief to taxpayers.

In the midst of rumors that the Chancellor plans to cut 2% off national insurance in the budget, accountants are warning that frozen thresholds are much more damaging. A 2% cut in national insurance may be a cheaper option for the Chancellor, but it will not benefit many taxpayers as only those of working age pay national insurance.

It is suggested that increasing basic rate bands, personal allowances, or personal savings allowances would provide more relief to taxpayers. Frozen thresholds are leading to a higher tax burden for taxpayers as salaries rise. The Chancellor should consider aligning tax thresholds with inflation to provide more relief to taxpayers. This is a controversial but short-term approach for political gain and may be reversed by an incoming government.

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