Accountants will no doubt be aware that Ed Balls, the Shadow Chancellor, recently called on George Osborne to make tax cuts in the Budget next month.
However, not all members of their profession believe this is the right way to go about improving the UK economy. Members of the UK200 Group have had mixed reactions to the suggestions that VAT should be reduced and income tax cut by three pence for a year.
One of the partners at Hillier Hopkins thinks the tax cuts suggested by Balls may not have any marked affect on consumer spending or economic growth. Ian Abrey explained that the Shadow Chancellor did not say how much it would cost to implement his proposed measures and it is by no means guaranteed that tax cuts would increase consumer spending and push the UK economy in the right direction.
Andrew Watkin said it would be a good idea to raise the income tax personal allowance to £10,000 because that would benefit the less well off members of society on a permanent basis, whereas any reduction in the VAT rate would only be a temporary measure.
The Chancellor will deliver this year’s Budget on March 21st and I’m sure that many people will be quick to tell him what he should do before he makes his speech.