first_imgWednesday 23 March 2011 9:25 pm ALLOWANCES for several direct taxes will rise at a slower rate than before, after changes made by chancellor George Osborne yesterday.The measure of inflation used to calculate increases in direct tax allowances will change from April next year, Osborne announced.Thresholds for capital gains tax (CGT), national insurance (NI) and ISAs, will now be pegged to the consumer price index (CPI) rather than the retail price index (RPI).The CPI typically runs below the RPI. In February the CPI jumped to 4.4 per cent (from four per cent in January), yet the RPI also spiked by 0.4 per cent, rising to 5.5 per cent.The change will bring a significant boost to the government coffers, according to Henderson’s Simon Ward.“Switching to CPI for direct taxes will raise £105m in 2012-13, rising to £1.08bn in 2015-16,” Ward said.However, CPI inflation will average 4.2 per cent this year – over twice the Bank of England’s target – the OBR admitted yesterday. It also revised up its inflation forecast for 2012, from two per cent to 2.5 per cent.In November the OBR forecast inflation at just 2.8 per cent this year, yet its prediction has been shattered in recent months. Higher expectations for government borrowing and the slowdown in growth were blamed on inflation by the OBR.“Higher-than-expected inflation is expected to squeeze household incomes and weaken consumer spending growth,” it said.“The upward revision to spending primarily reflects the impact of higher near-term inflation, which pushes up social security and debt interest bills,” the OBR also added. Ad Unmute by Taboolaby TaboolaSponsored LinksSponsored LinksPromoted LinksPromoted LinksYou May LikeMisterStoryWoman Files For Divorce After Seeing This Photo – Can You See Why?MisterStoryUndoTotal PastThe Ingenious Reason There Are No Mosquitoes At Disney WorldTotal PastUndoMoneyPailShe Was Famous, Now She Works In {State}MoneyPailUndoSerendipity TimesInside Coco Chanel’s Eerily Abandoned Mansion Frozen In TimeSerendipity TimesUndoBetterBe20 Stunning Female AthletesBetterBeUndoPeople TodayNewborn’s Strange Behavior Troubles Mom, 40 Years Later She Finds The Reason Behind ItPeople TodayUndoDrivepedia20 Of The Most Underrated Vintage CarsDrivepediaUndomoneycougar.comThis Proves The Osmonds Weren’t So Innocentmoneycougar.comUndoZen HeraldThe Truth About Why ’40s Actor John Wayne Didn’t Serve In WWII Has Come To LightZen HeraldUndo Read This NextRicky Schroder Calls Foo Fighters’ Dave Grohl ‘Ignorant Punk’ forThe WrapCNN’s Brian Stelter Draws Criticism for Asking Jen Psaki: ‘What Does theThe WrapDid Donald Trump Wear His Pants Backwards? Kriss Kross Memes Have AlreadyThe WrapPink Floyd’s Roger Waters Denies Zuckerberg’s Request to Use Song in Ad:The WrapHarvey Weinstein to Be Extradited to California to Face Sexual AssaultThe Wrap2 HFPA Members Resign Citing a Culture of ‘Corruption and Verbal Abuse’The Wrap’The View’: Meghan McCain Calls VP Kamala Harris a ‘Moron’ for BorderThe Wrap’Black Widow’ First Reactions: ‘This Is Like the MCU’s Bond Movie’The Wrap’Small Axe’: Behind the Music Everyone Grooved On in Steve McQueen’sThe Wrap whatsapp Share center_img KCS-content Show Comments ▼ whatsapp Tags: NULL Tax-free threshold on ISAs hit by change in inflation measurement from April 2012 last_img

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