The Government is continuing with its focus of reducing the deficit by announcing a range of tax reforms.
After weeks of speculation, George Osborne has confirmed that the 50p additional tax rate will fall to 45p from April 2013. He also declared that the personal tax allowance will increase by a further £1,105 to £9,205 at the same time.
The Chancellor of the Exchequer indicated that he intends to progress with the integration of National Insurance and Income Tax. A consultation on the issue is due to be launched shortly.
Malcolm McLean, Pensions Consultant at Barnett Waddingham, said: “Although it might be difficult to achieve a full merger, some progress to that end would seem to me to be very desirable.”
Major changes have also been made to pensions and the State Pension Age (SPA).
The Government has committed to ensure that the SPA rises in accordance with longevity. A single tiered state pension will also be introduced, which is expected to pay around £140 per week.