Warning on tax system 'instability'

George on  Sky Changes in the Budget have brought the total number of tax rises since the coalition Government came to power up to 413, a low-tax pressure group has said.

The TaxPayers' Alliance said the number of hikes had risen from 299 when it last calculated the figure in January.

While the group found there had also been 166 tax cuts since the 2010 general election, chief executive Matthew Sinclair warned that the "permanent revolution" in the tax system was undermining business confidence by making it more difficult to plan ahead.

Mr Sinclair said: "We estimated the number of tax rises in January and, since the coalition came in, it was 299. Our preliminary estimate after Budget 2013 is 413.

"There are lots of tax cuts - we are now up to 166 - but it is not nearly as many. This is evidence of a massive instability in the tax system. We are getting endless changes.

"We are seeing a sort of permanent revolution below the surface of our tax system, which matters because every one of these tax changes can affect a business or an investment.

"Everybody is wondering 'Will my investment today be affected by a tax change tomorrow?' That affects business confidence, so it is important."

Mr Sinclair welcomed many of the tax reductions in the package but he warned that the flagship new Employment Allowance (EA) - which offers every company a flat-rate £2,000 relief from employer's National Insurance - may not help those who need it most.

"EA particularly favours richer workers at smaller firms over poorer workers at bigger firms," he said. "And it is an additional complexity in the tax system."