Will income tax rise by 3%?
The government is continuing to cut in order to eliminate the budget deficit, but these falls in spending are also coupled with rises in income tax to boost the revenue which the Treasury receives.
It is estimated that £12.5 billion of extra tax revenue will be needed in order to ensure that the government can keep all of its financial obligations in check, and it is also believed that the long-term programme to stem spending cuts could extend long beyond the five-year plan that the Chancellor of the Exchequer, George Osborne, had initially hoped for.
In the three years following on from the next general election, this could very well mean that the average family has to pay £481 more in tax than they initially would have hoped for. Although we are rertreating out of recession, this could still prove problematic for many who are tightening their belts. One of the best solutions can be to get an accountant who will ensure that your finances are in check so you only need to pay as much tax as is necessary.