The UK Government could cut the basic rate of income tax by two percentage points by persuading Britons to return to work.
Work and Pensions Secretary Mel Stride said that if some of the 650,000 people who left the workforce during the pandemic returned, the Treasury could slash income tax.
Britons who left the workforce during the coronavirus pandemic, including early retirees, have resulted in an £11billion hit to the economy.
He explained on Thursday, May 11: “If we get all those [650,000 people] back into work, it would increase the size of the economy by about 0.2 percent, which would reduce the borrowing requirement by £11billion ($14billion), which would be enough to take 2p off the basic rate of tax.
“So what I’m in the business of doing is getting people back into work — because work is good for people — but also giving the Chancellor [Jeremy Hunt] the greatest possible flexibility when it comes to setting out his stall this autumn and in the spring to follow.”
READ MORE: Government pushes for Britons to ‘get back to work’ in hopes to cut income tax by 2p
IF YOU CAN’T SEE THE POLL ABOVE, CLICK HERE
Mr Stride said that despite some Britons returning to work, there were still 400,000 fewer workers than before the pandemic.
The basic rate could fall from 20p to 18p in the pound, saving Britons hundreds of pounds each year.
The income tax threshold has been frozen at £12,570 until April 2028, meaning Britons do not have to pay any tax on income up to this amount.
In response to the potential cut, the chief executive of the TaxPayers’ Alliance John O’Connell said: “An income tax cut would be a light at the end of the tunnel for hardworking Brits.
“Households grappling with falling living standards and a 70-year high tax burden need tax cuts today, not more empty promises.
“The Government should clamp down on wasteful spending and give taxpayers a well-deserved dividend this year as well as next.”
So what do YOU think? Should Britons be given a 2p cut in income tax? Vote in our poll and leave your thoughts in the comment section below.
Source: Expressnews.co.uk