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LITRG praises Darling's 'bold moves'

25 November 2008
Categories: News , LITRG , PBR 2008 , Pre-Budget Report 2008
But Chancellor could have gone further, says group

The Low Income Tax Reform Group (LITRG) has praised the Chancellor for aiming many of his proposals on those in the UK who are amongst the most disadvantaged'.

Alistair Darling's Pre-Budget Report 'made some bold moves in tax and NIC thresholds, rates and allowances,' said the organisation, which added a note of caution, saying whether MR Darling's measures 'will have the effects he anticipates is yet to be seen'.

The LITRG welcomed the 'continuing increase in personal allowances' because it 'will help recompense those who lost out in the 10% furore'.

The body also cheered the future adjustment to the National Insurance threshold, which 'will make understanding [of NI] easier for those on low incomes', but was disappointed that the Chancellor combined this alignment with a 0.5% increase in national insurance contributions with effect from April 2011.

The LITRG was equally displeased that 'no targeted VAT reliefs were announced for this deserving and hard-pressed group'.

Liberal Democrat deputy leader Vince Cable was less circumspect in his opinion of the PBR's help for those on low incomes.

"The Government acknowledges that the UK tax system is inherently unfair, but then announces that it will hit those struggling to make ends meet with yet higher tax bills by increasing National Insurance,' he said.

'Everyone earning over £19,000 will be hit.'

Dr Cable added: 'The new 45p Income Tax rate is nothing more than a fig leaf to cover a £5bn tax hike, which will hit millions of low earners and businesses.

'The Government has missed a golden opportunity to make the tax system permanently fairer.'

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