'Labour gov would bring back 10p tax rate'

Ed Miliband has announced that if Labour are returned to government they will bring back the 10p starting rate of tax.

It was actually the Labour party, led by Gordon Brown, that scrapped the 10p rate in 2008, and half a million people in Northern Ireland and the rest of the UK are said to have been disadvantaged by the change, despite the basic rate of tax being reduced from 22p to 20p. Mr Miliband said the previous Labour government had made "a mistake" and that he had opposed the move when he was a member of cabinet at that time. He proposes to fund the return of the 10p tax rate by introducing a mansion tax on properties valued over £2million.

The 10p tax rate kicked in after the personal allowance - the amount of a person's income that is tax free. Everyone would then pay 10p on the next £2,230 of their income, and it would then rise to 22p. The 10p tax rate was abolished, and the 22p rate was lowered to 20p, and that rate applies above the personal allowance up to the first £34,370 of income. The current government raised the personal allowance amount to £9,205 last April.

If you live in Northern Ireland and require advice on income tax, capital gains tax, inheritance tax, or general tax planning, contact Wilson Nesbitt in Belfast by calling 0800 840 9288.