Tax threshold increase ''a very welcome move'' for those with good employee benefits

News that the income tax threshold is to be increased could mean as many as 23 million employees will benefit from lower taxes.

The government predicts that 880,000 workers will be taken out of the system all together as the rate at which people begin to pay tax is raised by £1,000 to £7,475 per year.

This could combine with other employee benefits to make many workers wealthier from their paycheques, although the rise in VAT may offset any gains.

VAT is to be raised from 17.5 per cent to 20 per cent as of January 2011 under emergency Budget measures announced by the chancellor George Osborne yesterday (June 22nd).

Mark Wallace, campaign director for the TaxPayers'' Alliance, said: "Millions of people will be pleased to see the income tax threshold rising, which is a dose of long overdue contentment."

On average, Mr Osborne said spending across government departments would have to be cut by 25 per cent, while child tax credits were reduced for families earning over £40,000 per year.
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