Fiscal drag 'denting tax system's credibility'. By Dan Martin
Fiscal drag, the process by which governments do not increase tax exemptions and thresholds in line with inflation, is undermining the credibility of the UK tax system, experts have warned.
Baker Tilly found that 53% of accountants and 67% of legal professionals believed the fiscal drag has almost completely eroded the £8500 employee benefit threshold and should be updated. Although the original intention of the threshold was to tax benefits enjoyed by directors and higher paid employers, it now catches most employees in the UK.