Treasury has room to make £60bn in tax cuts

Soaring inflation and freezes to income tax thresholds mean the Treasury is set to take £60bn more in taxes by 2025 than it is now predicting, according to the Centre for Economics and Business Research (CEBR). Economists at the think-tank say higher inflation means a bigger economy, handing the Treasury an extra £133bn a year by 2024/25 – although around half of this will go toward covering extra spending. The CEBR’s deputy chairman Douglas McWilliams said: “Since these receipts will come from the effects of inflation and fiscal drag, meaning that people will be paying more tax than expected, it would not be unreasonable for the additional revenues to be used for tax cuts.” He added: “Arguably you shouldn’t be freezing allowances at all and you particularly shouldn’t be freezing them at a time of high inflation.”

The Daily Telegraph

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