HARD-WORKING Sun on Sunday readers today send a message to Chancellor Jeremy Hunt: “Give us a tax cut and put more pounds in our pockets.”
From a single mum to a white van driver and a pub landlord, readers are rallying for tax breaks in the Budget on March 6 to offer respite for squeezed households.
ReutersChancellor Jeremy Hunt is under pressure to cut taxes ahead of next month’s Budget[/caption]
Hunt is under pressure to cut National Insurance again, extend a 5p reduction on fuel duty and shave up to 2p off basic-rate income tax to help more than 30million low-paid workers.
And businesses including the hospitality trade want a VAT cut to help them keep their doors open in the face of huge costs.
Ministers said this month that they wanted to lower the tax burden on Brits, which is on course to hit its highest level since World War Two.
But this week the Government faced a blow when public finances were revealed to be less healthy than predicted.
At £16.7billion, January’s surplus — the difference between spending and tax income — was lower than economists expected, leading to fears of less room for tax reductions.
Here, a selection of Sun on Sunday readers call on the Chancellor to slash tax.
FAMILY OF FIVE
Gemma & Stephen Keough
MARRIED Gemma and Stephen live in Manchester with their children Brianna, 13, Kenneth, ten, and seven-year-old Kayden – but without tax cuts they say they are facing poverty despite both working.
Gemma runs a model agency while Stephen is a white van man with his own property maintenance business.
The SunGemma and Stephen Keough said: ‘We’re the lower-income grafters constantly asked to pay more tax. We’ll end up on benefits if it continues’[/caption]
They are both 36.
Gemma said: “After taxes, National Insurance and VAT payments we get by on £33,000 a year. We’re the lower-income grafters who constantly get asked to pay more tax and we will end up on benefits if it continues.
“We rely on every money-saving tip we can. Families like ours are forgotten by Jeremy Hunt. We are the families who pay more every Budget while the rich get tax breaks.”
Stephen wants to see the basic income tax threshold increased to keep more workers off benefits.
He said: “It is the few extra pounds we all need. Tax breaks will keep us just above the poverty line. We’re desperate.”
He also wants fuel duty slashed as he cannot pass on the cost of petrol to clients, because they can’t afford to pay more either.
And he thinks that January’s drop of two percentage points in National Insurance contributions wasn’t enough, saying: “If it came down a little further, we could start saving for a house.”
He believes stamp duty has to be axed too and that VAT needs a radical overhaul before it cripples more businesses.
Stephen said: “I’m working just to pay the VAT and tax at the moment.
“Mr Hunt needs to understand that increasing VAT and not providing tax breaks means our family’s income is actually coming down and will never go up.”
PUB LANDLORD
Gareth Redhead
HAVING taken over the Saracens Head in rural Halsall, Lancs last year, Gareth has found that after beer duty, VAT, rising energy costs and staff wages, he is only left making 12p on each pint sold.
He is now among pub and restaurant owners calling for VAT to be slashed from 20 per cent to ten per cent for the hospitality industry.
PP.Gareth Redhead said: ‘I make just 12p a pint. We’re busy but we need Govt help if we’re to keep going’[/caption]
Gareth, 36, said: “The incredible tax cost in this country puts businesses like ours at risk. Hunt needs to bring VAT down to ten per cent to stop more from closing their doors.”
Gareth and partner Lynsey, 42, who has daughters aged eight and 11 from a previous relationship, shut the doors to another business, a village restaurant, on December 31.
“The costs were just too high,” said Gareth. The couple already charge below brewery rates on their draught beers, which are £4.20 and £5.80 a pint.
Gareth said: “Our customers include farmers. If we put costs up we’re at serious risk of pricing them out of the pub.
“Beer duty and VAT means we’re paying three to five per cent more but we can’t make anything back without some tax breaks.”
Gareth, who employs 16 full-time staff plus casual workers, said he has seen a 50 per cent increase in the cost of running his business since he took over.
He does not take a wage.
He said: “We’re a busy pub but we need the Government’s help if we’re to keep going and claw any money back from our business, which we can put back into the economy ourselves and keep local producers and workers in business.”
SINGLE MUM
Michelle Bell
WIDOWED Michelle, who recently started up her own dog-grooming business, says she is being hammered by taxes.
A single mum of two grown-up children with special needs, she feels people in her position are “ignored”.
Oliver DixonMichelle Bell said: ‘I was an essential worker but there was no support tax-wise for me’[/caption]
Michelle, 43 – whose son George, 23, and daughter Eleanor, 19, live at home – said: “As a single working parent, I pay the hidden singles’ tax.
“My tax burden is much heavier than couples’ because I am the sole provider for my household, but we’re ignored.”
Michelle, who lives in Crawley, West Sussex, set up her business this year after leaving her 20-year social work career and £34,000 salary to have a better work-life balance.
She is still picking up social work shifts but she needs to earn £12,000 from dog grooming to make ends meet.
She said: “I need all the help I can get as a new start-up, but there is no small business grant I can get as a single parent setting up on my own. Tax breaks for businesses like mine in the first and second years and in the start-up phase are critical.”
Changes to income tax could help her free up money to invest in her business and household.
She said: “I need National Insurance contributions lowered and PAYE tax dropped. I need the income tax threshold increased – this would help me invest to grow my business – and I need the right to claim single person council tax.
“The Government needs to rethink that for families with special-needs adults like mine.”
Michelle spends £700 a month on rent but would love to buy a house.
“Stamp duty is stopping that,” she said. “I was an essential worker but there was no support tax-wise for me. I have moved into the business world but need tax relief and tax support.
“Fuel duty needs to be rethought too. Work is eight miles from home and the cost of petrol is another fear.”
VERDICT
By Paul Falvey, Tax Partner at BDO
WHILE Michelle and Stephen are asking for a cut in fuel duty, it seems unlikely because that is a cash cow for the Chancellor.
But an increase is also unlikely as that would be inflationary.
BDOPaul Falvey, Tax Partner at BDO[/caption]
A reduction in VAT would help many but, again, Hunt will probably fear stoking inflation.
I’ll cross my fingers for a cut in beer duty for Gareth.
An increase in the national minimum wage of close to ten per cent kicks in from April.
This will benefit workers but small businesses, such as pubs, will struggle to manage the cost.
The Chancellor has said he will slash up to 75 per cent off business rate bills for small hospitality businesses in 2024, so he may feel he has done enough.
Young families may be pleased to hear Hunt will want to be seen to be helping first-time buyers.
But this is more likely in the form of a new “help to buy”-style scheme than a stamp duty cut.
The income tax personal allowance has been frozen at £12,570 since April 2021.
Increasing this threshold is expensive for the Chancellor as it benefits almost everyone, so it’s also not likely this year.