Aim to speed up tax breaks for low paid - Oman Daily Observer

LONDON — Britain's Liberal Democrat junior coalition partners called for the government yesterday to accelerate plans to exempt more low-paid workers from paying income tax, hoping to fund the move by taxing expensive homes and clamping down on tax evasion.
In a speech in London which may irritate some on the right wing of the Conservative-led coalition, Deputy Prime Minister Nick Clegg warned that "household budgets are approaching a state of emergency, and the government needs a rapid response".
Finance minister George Osborne is expected to announce a further increase in the personal allowance for income tax in his March budget, but it is unclear whether he will be in a position to meet Clegg's costly challenge.
Britain's economy contracted in the last three months of 2011 and, with unemployment rising and wages stagnant, the government is facing greater pressure to soften its austerity plan of big spending cuts and tax rises. Clegg's push for a smaller tax burden on the lowest paid, however, would be a fiscally-neutral move which he hopes can be funded by tackling tax avoidance by big companies and rich individuals, and a politically-controversial tax on expensive houses.
"I want to help hard-pressed and hardworking families. If that means asking more from those at the top, so be it," Clegg, who also agrees in principle with extending income tax exemption for workers up to the level of Britain's minimum wage, said.
The Conservative-led coalition has committed to raising the threshold at which employees start paying tax to £10,000 by 2015. That is a crucial pledge for the Liberal Democrats, who have had to abandon several policies since signing up to a coalition in 2010 which has damaged their popularity.
The personal allowance for income tax will rise in April to £8,105 from the current £7,475 for the year 2012/13, an increase which the Treasury estimates will cost about £1.2 billion a year in lost revenue. One estimate put the total cost of the allowance increase to £10,000 at around nine billion pounds. "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," Clegg said.
A source close to Clegg said the Liberal Democrat leader and party colleague Danny Alexander — finance minister George Osborne's number two at the Treasury — will be pressing the case within government ahead of the March 21 annual budget.
"The planned steady increase aimed at delivering the £10,000 personal allowance by 2015 just won't cut it any more," the source said.
The Labour opposition welcomed Clegg's efforts to ease the financial burden on low and middle income families, but accused the coalition of making it harder for such households during the economic malaise. — Reuters