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Telegraph readers’ message to Jeremy Hunt: Raise tax thresholds to win the election

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The Spring Budget will be held on March 6 and is set to be one of the most significant political moments between now and the next election, expected this year.

Chancellor Jeremy Hunt warned at the end of January that the tax cuts set to be unveiled in the Spring Budget will not be as large as those announced in November. Yet Telegraph readers point out that the Conservatives’ freeze on various tax thresholds amounts to a big “stealth” tax rise.

With many voters having become disillusioned with the Conservative government, Mr Hunt is under pressure to offer core Tory supporters some red meat.

Readers have set out what they want to see in the March Budget, with many arguing that a tax giveaway is the only way to take the fight to Labour.

‘I want to see tax cuts to support the middle and high earners’

Changes to the current rates of income tax and tax-free allowances are among the most important changes readers want to see.

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For Roger B, come April 6, he would have been paying taxes for 57 years. “For each year that goes by, despite now being retired, I get dragged back yet further by a freezing of the tax bands, or by inflation as my standard of living continues to drop.”

Similarly, Joe Jones wants to see tax cuts to support the middle and high earners. He says, “the UK is becoming too expensive for most of us and when you compare a typical basket of goods in the UK vs our Western allies, I am flabbergasted at how expensive they now are.

“Unless things change dramatically over the next five years, I will be looking to retire in another country and along with my friends and peers alike,” he continues.

An anonymous reader supports the raising of income tax thresholds, which he believes is “the popular and fair tax cut that benefits all the working population.

“That will stimulate growth and probably win them the election. Hopefully, they will develop a bit of common sense moving forward and not subject us to another five years of nothingness.

“What happened to all the 2019 growth pledges? Wrecked by the Treasury with gutless politicians unable and too weak to put them in their place.”

Reader Bryan Tomlinson also wants income tax thresholds to rise, thinking it “ridiculous that pensioners are soon going to start paying tax on the basic pension”.

Peter Griffiths wants the personal allowance to be raised to £15,000, “to help the foundations of the great British economy: the cleaners and the carers”.

He continues: “I’m fed up with talk, we need government action.”

Terry Idiens wants to see the threshold increase to £20,000, “to take pensioners and low income paid families out of paying tax”.

George Crozier, of the Chartered Institute of Taxation, says: “The freezing of income tax thresholds has been a huge revenue-raiser for the government since the policy was introduced in 2022, having been announced in the previous year’s Budget.

“In the next tax year it’s expected to bring in an extra £23bn for the government, compared to what would have been raised if thresholds had increased in line with inflation. By 2027, when the policy is currently set to run to, forecasts are it will be bringing in an extra £34bn a year. National Insurance threshold freezes are expected to add an extra £9bn to that.

“All this tells us that it would be very expensive for the government to reverse this policy.”

However, Mr Crozier said there was “potentially” good news in rumours there would be some kind of tax cut. A 1p cut to the basic rate of tax would cost the Treasury £6bn, while raising the personal allowance by £1,000 would cost a similar amount, he said.

‘What’s needed are cuts in unnecessary spending’

Other readers call on Jeremy Hunt to reduce what they deem wasteful and unnecessary spending.

Reader Jay Ro is one of many readers who bemoan the Government’s lack of “fiscal headroom” given “the ridiculous expenditure on hotels for illegals and the bloated welfare state”.

Another reader, Martin Whapshott, argues: “Immigrants should have no entitlement to public services including free healthcare, benefits, housing or education until they have paid into the system for at least five years.”

Similarly, Phil Burton questions: “How can he keep a straight face denying millions tax cuts at a time of huge fiscal drag all whilst letting over one million people settle here a year? People with no history of paying taxes, many of whom never will pay taxes.”

Others turn their attention to the “bloated” public sector. Reader Andrew Paul, for example, calls for the “removal of all final salary pensions from the public sector, including the Civil Service, and the reduction of funding to all ancillary government quangos”.

He also believes we should “stop giving subsidies to the likes of wind farm companies, renewable energy companies and the EV industry”.

For reader Christopher Powell, he believes that government spending cuts on everything other than education are necessary.

He continues: “If interest rates and inflation fall over the next few years, growth returns and so government borrowing reduces and we can look to increase the income tax allowances.”

‘The inheritance tax threshold has not been increased once in the last 14 years’

Readers continue to support this newspaper’s campaign to abolish for what they deem the most unjust tax, inheritance tax (IHT).

One anonymous reader labels IHT “the most inefficient and disincentivising tax in existence”.

“People work primarily to look after their families before and after death, consciously or subconsciously,” they say, “it is behaviourally instinctive and shouldn’t be penalised given survival of the species depends on motivation of this sort.”

Reader Lou Bath highlights how the threshold “has not been increased in the 14 years the ‘fake’ Tories have been in power. Now just about every home in the South East is worth more than the threshold, yet people like the Duke of Westminster can inherit £8bn and not pay a penny in inheritance tax”.

Caferino Fernandez thinks the threshold should double to £750,000, reasoning how “it has been frozen for years when it should have kept pace with inflation”.

Reader Tom Duffy, however, advocates for its abolition, proposing to “introduce a capital gains tax on death. That way all of a person’s estate will have borne tax in some form and the case for inheritance tax is removed”.

He continues: “A person’s wealth is going to be mostly stored up in earnings plus interest and other returns on investing savings. Inheritance tax is a double tax on earnings and interest and is unsound for that reason.”

Finally, Johan Lundblad points out how “Sweden did away with inheritance tax many years ago with – on balance – a positive outcome for the economy and the taxpayers. People no longer had to move out of Sweden to avoid the tax and instead stayed, continued to pay their other taxes and injected the money into the economy.”

Therefore, he suggests that “the only sensible thing, both economically and morally, is to do away with it completely”.

David Sturrock, a senior research economist at the Institute for Fiscal Studies, suggested limiting or cutting off some of the many loopholes in the IHT regime.

“The current system has exemptions and reliefs which mean that business, agricultural and pension assets can be passed on tax-free. This is unfair, distorts decisions and opens up channels for tax-avoidance.

“Curtailing these reliefs would raise revenues which could be used to raise the inheritance tax threshold, cut the tax rate or fund public spending or other tax cuts.”

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