PARENTS COULD be hit by a marginal income tax rate of 78% because of the complex way benefits and taxes interact, leading accountants argue in the Daily Telegraph .
Grant Thornton forecasts the Chancellor's Pre-Budget Report will freeze personal allowances - as he has done before - but the effect will be for tax to absorb more than three quarters of some parents' pay rises.
Baker Tilly and the Institute of Chartered Accountants in England & Wales (ICAEW) have urged Gordon Brown to simplify the system and reverse the trend toward stealth taxes, warning "the bond of trust between tax authorities and tax payers is in danger of breaking".
Ian Luder, tax partner at Grant Thornton, said: "By freezing allowances, Gordon Brown will drag more people into the higher tax bracket and many of Britain's young families, especially in London, could end up with a marginal tax rate of up to 78%.
"Ironically, these are the people that Mr Brown claims to be helping, but where is the incentive for them to work longer hours if they are going to be taxed at such a high rate?"
INFLATION SLOWED in October for the first time in more than year, giving the strongest indication yet price pressures in the economy may have peaked and causing analysts to speculate on a Bank of England interest rate cut next year, says the Scotsman.
Data from the Office for National Statistics (ONS) revealed consumer price inflation dropped to 2.3% from a record 2.5% the month before, says the paper.
It was the second set of figures in as many days signalling inflation was on the wane - on Monday, official factory gate prices statistics for October eased from an annual rate of 3.3% to just 2.6%.
"The Bank of England, like other central banks, is clearly on inflation alert but so far so good, as the producer and consumer price data should help to ease those fears," John Butler, economist at HSBC, told the Scotsman.
BANKERS GIVING advice to companies on sorting out their pension problems will be among the highest earners in the City this year, reports the Times.
A report from Armstrong International, a recruitment firm, found an adviser with specialist knowledge of company pension schemes can expect to earn more than $3m (£1.7m) this year, helped by bonus increases of 20% or more.
The firm predicts bankers specialising in pension work will continue to be among the highest-paid next year as companies grapple with large pension deficits and tough new rules that give greater power to trustees.
This new breed of top earners contrasts with previous years of high bonuses, when the most highly remunerated people in the Square Mile have been those advising on multimillion-pound mergers.
If you have any comments you would like to add to this story or would like to speak to its author about a similar subject, telephone Emily Perryman on 020 7968 4554 or email [email protected].IFAonline
Two global vehicles
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