Flat 30 per cent income tax rate proposed

Lobby groups have proposed the idea of a flat rate of 30 per cent income tax for all in the UK.The 2020 Tax Commission says the move would boost growth. Its report also argues for the abolition of National Insurance and for the basic personal allowance to be raised to £10,000.The report finds that these changes could result in a tax cut of £3,400 for a two-income household bringing in around £28,000 a year.The Tax Commission, which is made up of the Taxpayers' Alliance and the Institute of Directors, argues that the flat income tax rate would need to be phased in and spending would need to be cut further in order to avoid adding to the deficit. However, it says that after 15 years, borrowing would be reduced by £35 billion.The Commission recommends limiting taxation as a whole to a third of national income, and limiting spending to the same level. This would mean extending cuts in public expenditure to 2020.Allister Heath, chairman of the commission and editor of City AM, is quoted by the BBC as saying,"It is time for Britain to make a vital choice between tweaking the status quo and letting our economy continue to be crippled by complex and punitive taxes, and drastically changing course with a radical but realistic plan for a tax system fit for the 21st century.”

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