Accounting firm MacIntyre Hudson recently released its predictions ahead of this year’s Pre-Budget Report, including details of possible income tax changes.
Following the announcement of a new 50% rate of income tax for earnings over £150,000, the firm expects that the chancellor will restore the personal allowance for earnings over £100,000 a year, but may also reduce the threshold for those paying the new 50p top rate of income tax to apply to earnings over £110,000 a year.
“The scheme to claw back the personal allowance created a marginal rate of tax of 60%. As comfortable as they may be with a return to 50p in the pound, Labour would do well to distance itself from rates reminiscent of the reign of Dennis Healey, whether galvanising core voters or not”, said Patrick King, principal at MacIntyre Hudson.
The government may also make a small concession to retailers by delaying the VAT increase until February 2010, and create a flat rate of corporation tax of 25% to be phased in by 2013.
For more coverage of the Pre-Budget report predictions, visit our sister site, FinanceWeek.co.uk.