Budget 2015: Income tax is locked, but the Chancellor could still move the goalposts

The Tories pledged to ban tax rises for five years but experts predict George Osborne will increase revenues by redefining what is taxed

Click to follow
Indy Politics

The income tax threshold – the amount you can earn and not pay tax – increased to £10,800 in April and is set to climb again next April to £11,000.

There’s also a lock on rises to income tax during the current parliament. So will the Chancellor steer clear?

Probably not, reckons Alex Henderson, tax partner at PwC. “Don’t assume the tax lock commitment means no changes to income tax, national insurance or VAT. There’s scope to raise more revenue without increasing tax rates by widening the definitions of what’s taxed, or withdrawing tax reliefs.”

The Conservative party also pledged to raise the 40p tax threshold from £42,385 to £50,000 – a controversial move that could be labelled as just another tax cut for higher earners, whilst those in need face losing welfare support through cuts to tax credits.

Budget 2015:
Banks tell Osborne to rethink the banking levy
Stamp duty unlikely to be changed by Osborne
300,000 people plead with Osborne not to cut tax credits
Boris Johnson calls on Osborne to cut top rate of income
This chart shows which benefits George Osborne might cut

Capital gains

The Chancellor could redefine short-term capital gains as income as some other countries do, which would hit those selling at a profit through eBay and other online sites.

National insurance

Although a pledge was made to freeze the rate of national insurance contributions, there have been no commitments to raise the earnings threshold in line with the personal allowance.