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Government could raise income tax allowance ‘above £10,000’


Conservative Party chairman Grant Shapps has told the BBC that the Government might consider raising the starting point for paying income tax above the Coalition’s stated target of £10,000.


From April this year, individuals will receive the first £9,440 of their income free of tax – a rate that Chancellor George Osborne has described as being within “touching distance” of the £10,000 personal income tax allowance goal.


Now Mr Schapps’ comments, made on BBC Radio 5 Live’s Pienaar’s Politics programme, have fuelled speculation that next month’s Budget might see another rise in the threshold, and leave the Chancellor with two more Budgets – in 2014 and 2015 – in which to raise it up to or beyond the £10,000 mark.


“We've already said that we want to get it up to £10,000 and I don't think I'd be revealing too much to say that our ambition might be to get it higher,” Mr Schapps said.


His remarks followed a Labour pledge last week to reintroduce the 10p rate of tax, which was scrapped by Gordon Brown, if the party returns to power at the next general election. Mr Shapps criticised these plans as being too complicated.


“I certainly think taking people out of tax entirely is the most efficient best way to do this,” he said.


“Having tax inspectors running around trying to charge people even if it's only 10p in the pound and work out their tax situation, for the hardest pressed people on the lowest pay in this country, is not good use of taxpayers’ time.


“People should be able to earn that money without having to worry about paying that tax.”