Queen's Speech: Tax and benefit system
Notes on: "The tax and benefits system will be made fairer and simpler."
Reasons for the policy
The Government will create a fairer tax system that helps those on lower and middle incomes. The first Budget will announce a significant increase in the personal allowance for income tax, with a longer-term objective to increase the personal allowance to £10,000. The earnings link for the basic state pension will be restored from April 2011.
The Government believes in lower and simpler taxation. The Budget will set out a five-year roadmap for a big reform of corporation tax. It will reduce and simplify corporation tax rates to send out a signal that Britain is open to business again. Capital gains on non-business assets will be taxed at rates closer to those applied to income tax, with generous exemptions for entrepreneurs. And the Government will reduce the regulatory burden, and will create an independent Office of Tax Simplification to suggest reforms to the tax system.