No Tax Cuts for UK Taxpayers

September 1, 2010 Taxation in UK

fresh start danny alexander 03UK taxpayers’ hopes for any reduction to their tax burden have been dashed for the next several years, after comments made by a UK Treasury official.

There will not be any significant reduction to most UK taxpayers’ liabilities at least until the next general election in 2015, according to a statement made on August 29th by Danny Alexander, Chief Secretary to the Treasury. Explaining the decision, he said, “The tax burden is necessary to get the finances in order. It will have to stay at that level for quite some time.” The Minister added that the revenue opportunities provided by maintaining current tax rates will be used to implement the Liberal Democratic Party’s plan to reduce the national budget deficit from the current level of 11 percent to nothing, within five years.

Danny Alexander conceded that there might be rebalances in tax rates within the foreseeable future but cumulative tax liabilities would remain the same, especially for middle-income earners. He admitted that the move would not prove popular with most taxpayers, but indicated that lower-income families might receive marginal tax relief, if economic conditions allowed. He added further, “In due course [the Treasury will be] looking at other ways to rebalance, looking at green taxes.” Peter Black, Liberal

The Government has already committed to cutting its public spending by up to 40 percent over the next five years, in order to reduce the national deficit figure. When asked about the feasibility of tax cuts at the end of the spending decrease program, Danny Alexander said, “You are asking me to take decisions for five years down the line now and I am not going to do that.”

Opposition political parties have already replied to the announcement with disapproval. Philip Davies, Conservative Party MP for Shipley, West Yorks, said: “We all understand that we have to get the deficit down. However, you start economic growth by having lower levels of taxation.”

Photo by Liberal Democrats