UK Tax Burden To Increase By At Least £8.6 Billion, Says PwC

by Robert Lee, Tax-News.com, London

23 October 2002

International accounting firm, PricewaterhouseCoopers has warned that any tax increases necessary to plug the UK government's £7 billion first-half budget gap will come on top of an £8.6 billion increase in the tax burden in fiscal 2003-04.

In an analysis released prior to Chancellor, Gordon Brown's pre-budget report, PwC warned that the increase in the National Insurance rate, taken in combination with the freezing of personal tax allowances outlined in the last budget are likely to have an impact on UK taxpayers equivalent to three pence on income tax rates.

Speaking recently, PricewaterhouseCoopers tax partner and former head of the Chartered Institute of Taxation, John Whiting warned that:

'A gap is opening up. The Chancellor must be getting worried. He might need to raise even more money. If he does, the simplest route would be a penny on income tax.'

He added: 'A rise in VAT from 17.5% to 18.5% is the other possibility. It would raise £3.5 billion.'

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