Newspaper article The Evening Standard (London, England)

'Hotch-Potch' Budget Traps Five Million in 40p Tax Net

Newspaper article The Evening Standard (London, England)

'Hotch-Potch' Budget Traps Five Million in 40p Tax Net

Article excerpt

Byline: Nicholas Cecil and Joe Murphy

GEORGE OSBORNE'S Budget was attacked as a "hotch-potch of reforms" today by experts, who warned the number of people on the 40p income tax rate is soaring towards five million.

In a highly critical verdict, the Institute for Fiscal Studies claimed the Chancellor's blueprint bore "as many marks of political expediency as it does of strategic reform". The institute: Tore into the new seven per cent stamp duty rate on homes worth more than [pounds sterling]2 million -- saying Business Secretary Vince Cable's "mansion tax" may have been preferable.

Warned that the new 45p top income tax rate could rake in far less than the Treasury expects.

Said 325,000 more people would be dragged into being higher-rate taxpayers next year, with five million higherrate payers by 2014.

Criticised the Chancellor for "dressing up" the personal allowance changes which will hit pensioners as a tax simplification measure. Tory MPs also turned on Mr Osborne. One Rightwinger said: "If you are just a tactician the lack of strategy will catch up with you. If you chase headlines, you will end up with headlines chasing you."

But the Chancellor won relief from the backlash over the "granny tax", as the IFS reported pensioners had been the group hit least hard by tax rises and spending cuts. Mr Osborne shrugged off criticism of the [pounds sterling]3 billion squeeze on pensioners' tax allowances, saying: "My job is not to write the next day's newspaper headlines. My job is to have a budget that gets the economy moving, helps working people, helps Britain earn its way in the world, gets us out of the economic mess we got ourselves into a few years ago."

He denied trying to hide the changes to pensioner allowances, which will be frozen in cash terms and closed to new retirees. …

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