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Osborne promises 'biggest tax cuts in a generation'

Chancellor of the Exchequer George Osborne during his visit to the National Graphene Insitute in Castleford, Manchester. Credit: Lynne Cameron/PA Wire

British workers and businesses will this week benefit from biggest tax cuts in a generation, George Osborne will claim.

Measures including the rise in the income tax personal allowance to £10,000 and cuts in business taxes will be brought in over the coming days.

Tomorrow the corporation tax rate will be cut by 1% to 21% and reforms to business rates will be introduced. The annual investment allowance for firms will be doubled to £500,000.

The £10,000 income tax personal allowance comes into effect on Sunday, along with the employment allowance which cuts employers' National Insurance contributions by up to £2,000.

Giving a speech in Essex later today, Mr Osborne will say that Sunday will be "the culmination of this week that sees the biggest reduction of business and personal tax in two decades".

Lord Lamont: 40p rate 'catches not very well off'

Former Conservative Chancellor Lord Lamont has told ITV News George Osborne should raise the threshold at which workers pay 40% income tax.

He said that some the current threshold was meaning some "not very well off" workers such as teachers, nurses and train drivers are being "caught" by the higher rate.

Lord Lamont added that he hoped a pledge to raise the threshold would be included in the next Conservative Party manifesto.

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Osborne warns tax evaders: We are coming after them

George Osborne said the Government's latest clampdown on tax evasion`would make it very clear to people that if they do not pay their taxes then "we are coming after them".

The Chancellor said, "It is not fair for people to do that, it means that other people have to pay higher taxes and ultimately, as a society, we've all got to make a contribution."

UK targets offshore accounts in tax evasion clampdown

Chancellor George Osborne has announced a new clampdown on tax evasion targeting offshore account holders.

He warned that anyone who fails to declare all of their income will have to pay the tax itself as well as penalties of up to twice that sum, and they could even face imprisonment.

The HM Revenue and Customs campaign will be in magazines and newspapers on Monday. Credit: Rui Vieira/PA Wire

Mr Osborne said: "We're throwing all the resources of the HMRC, our tax collectors, behind this. We'll be running adverts to give people fair warning that if they're hiding money offshore overseas that's not acceptable.

"We will find people - they have to pay their taxes and ultimately this is about fairness".

The new campaign will run in national newspapers and weekly magazines from tomorrow.

Boris Johnson repeats call for tax rate to be cut to 40p

London mayor Boris Johnson has repeated his call for the tax rate to be cut to 40p - and declined to rule out the possibility of it happening before the general election.

Earlier, the Liberal Democrat Chief Secretary to the Treasury - Danny Alexander - said the rate would be cut "over my dead body".

London Mayor Boris Johnson. Credit: Press Association

"The last thing I want to see is a pointless sacrifice from the Liberal Democrats, let alone the dead body of Danny Alexander," he told BBC Radio 4's Today programme.

"Sooner or later there will have to be a new Conservative manifesto and I can't believe we are going to go into an election on a campaign to keep our tax rates higher."

Asked if that meant he accepted it could not happen until after 2015, he said: "Who can say what will happen to Danny Alexander? Stranger things have happened at sea."I don't think that it is reasonable always to keep UK tax rates higher than those of competitor countries.

"UK income tax is now higher than the average in the EU. That never used to be the case. I don't see why it should be the case for the long term and I see no reason why we shouldn't bring it down."

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Lib Dems 'will not allow' cut to top rate of tax

Chief Secretary to the Treasury Danny Alexander said the Liberal Democrats would not allow a cut to the top rate of tax in this Parliament.

Chief Secretary to the Treasury Danny Alexander. Credit: Anthony Devlin/PA Archive

In an interview with the Daily Mirror, he was asked about David Cameron's refusal to rule out cutting the top rate and replied: "You'll have to ask them (the Tories) why they answer those questions in those ways.

"If you ask me would I cut the top rate below 45p the answer is 'no'. In this Parliament we will not allow that to happen."

Mr Alexander also had some praise for Labour's Ed Balls - amid questions over whether the Lib Dems could work with the party in a future coalition.

"I play cricket with Ed Balls. I have opened the bowling at Lords while he kept wicket behind the stumps and I have to say he didn't let anything past him. So I would endorse him as a wicket keeper," he said.

Senior Lib Dem: Tax cut for wealthy 'over my dead body'

Danny Alexander, the Liberal Democrat Chief Secretary to the Treasury, said any cuts to the top rate of tax before the next general election will be "over my dead body".

Danny Alexander (right) with Chancellor George Osborne. Credit: Alastair Grant/PA Wire

Mr Alexander made the comment as he dismissed calls from some Tories who want to see the rate reduced from 45p to 40p before the 2015 poll.

David Cameron fuelled speculation by repeatedly refusing to rule out further trimming the rate for those earning over £150,000 a year. It fell from 50p last year.

But in an interview with the Daily Mirror, Mr Alexander said: "I think it is right at 45%. I wouldn't go to cutting below 45%.

"I would say that would happen over my dead body.

Vat hike has cost pensioner couples £825, say Labour

For pensioner couples the increase caused by VAT going up to 20% is £825 while single parent families have paid an extra £625, according to Labour.

David Cameron claims he is helping ordinary families, but his figures always omit the big rise in VAT three years ago. He gives with one hand, but takes away much more with the other.

The truth is that the only people who have got big a tax cut under this Government are those earning over £150,000.

And while everyone else faces a cost-of-living crisis, David Cameron wants to give the richest 1% another big tax cut. He's totally out of touch.

– Shadow treasury minister Shabana Mahmood

Coalition vat hike has 'cost families £1,300' Labour claim

The coalition's VAT hike has cost the average family more than £1,300 over the past three years, Labour has claimed. Chancellor George Osborne used his first Budget in June 2010 to announce that he was raising the rate of VAT from 17.5% to 20% from January 2011.

VAT increased from 17.5% to 20% from January 2011. Credit: Owen Humphreys/PA Wire/Press Association Images

Labour said that Treasury figures show that couples with children have now paid out on average £1,350 more as a result of the change.

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