Budget: Tax rises and spending cuts expected.
Summary: Council tax bills could be frozen next year under plans to be included in the emergency Budget.
Council tax bills could be frozen next year under plans to be included in the emergency Budget.
Elsewhere, tax rises and public spending cuts look set to dominate the budget as Chancellor George Osborne is expected to unveil a harsh package of austerity measures.
Mr Osborne has defended the severity of the "tough but fair" measures - warning the country was on "the road to ruin" without swifter action to tackle the record deficit. But the emergency budget is expected to be the first major test of relations between the newly formed coalition government.
A rise in the Capital Gains Tax has been a key policy for the Liberal Democrat's since their election manifesto called for it to be brought into line with income tax. Senior Tories have argued against the hike, people would find ways to avoid the payment.
VAT is considered one of the most likely taxes to rise. It currently stands at 17.5 per cent but could go up to 20 per cent. The rise would generate around Au10billion but the Bank of England has expressed fears it could hurt consumer spending.
The Conservatives have been pushing for a cut to Corporation Tax, costing a total of Au1.2billion to encourage business growth. However, Liberal Democrat Business Secretary, Vince Cable, has previously warned against unfunded tax cuts.
A series of measures ranging from a bank levy to a rise in the tax on tobacco and alcohol and a pledge to raise the income tax threshold to Au10,000 in the future.
Chancellor Osborne has committed to eliminating the bulk of Britain's structural deficit over the next five years, starting with Au6billion of cuts this fiscal year.
Independent Television News Limited 2010. All rights reserved.
Independent Television News Limited 2009. All rights reserved.
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|Publication:||Independent Television News Limited (ITN)|
|Date:||Jun 21, 2010|
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