Deputy Prime Minister Nick Clegg is set to propose plans to raise the minimum level at which people pay income tax to £10,000 before the next election, according to reports.
Clegg is set say he wants the coalition to go ‘further and faster’ in raising the personal allowance from its current £7,475 to £10,000 sooner than it had initially proposed in a bid to ease pressure on ‘ordinary hard working people’ who have reached ‘boiling point.’
The proposed tax cuts – which would give back over £700 to anyone earning under £100,000 a year – would be funded by new levies on the wealthy.
The government already plans to increase the level at which income tax becomes payable, from its current £7,475 to £10,000 by the next election set for 2015. The tax-free threshold was expected to rise by around £630 annually.
The income tax threshold was raised by £1,000 to £7,475 in the 2010 Budget, and the government plans to increase it further to £8,105 this year.
According to the BBC Clegg is expected to tell the Resolution Foundation in London that he wants this change bought about sooner.
‘Today I want to make clear that I want the coalition to go further and faster in delivering the full £10,000 allowance, because the pressure on family finances is reaching boiling point.
‘These families have seen their earnings in relative decline for a decade, compared to those at the top. That has accelerated since 2008, with lower real wages and fewer hours at work.'
He will argue that the coalition has raised capital gains tax and reduced tax breaks on pension funds 'for the very rich’, while ‘clamping down’ on tax avoiders to raise an extra £7 billion a year.