This article is part of Morningstar’s Guide to Financial Planning, your handbook for making the most of your tax-free investing opportunities, reducing your annual – and lifetime – tax bill while keeping HMRC onside.
Chancellor George Osborne plans to cut taxes for higher earners in next week’s Budget. The Conservatives also want to freeze fuel duty and raise the income tax threshold to £12,500.
Liberal Democrat Danny Alexander, Chief Secretary to the Treasury, says he plans to block these plans – and instead will be proposing a mansion tax should the LibDems make it back into parliament following the General Election.
The Green Party have proposed a new wealth tax on the top 1% in their policies, as well as a “Robin Hood Tax” on the banks and the proposals to close tax loopholes. A 31% flat rate of income tax was Ukip's policy at the 2010 General Election, but this time around leader Nigel Farage is championing a raise in the income tax threshold for all to £13,500 – up from the £10,000 it is today.
And what about the Labour Party? It wants to introduce a lower rate of tax at 10p and bring back the highest rate of tax of 50p in the £1 for those earning more than £150,000.
Politicians clearly have vastly different views on how the tax system should be changed, so as part of our week-long Morningstar’s Guide to Financial Planning we took to the streets to ask the public how they thought the current tax system could be improved.
