Tax experts are expected to inform MPs today that the middle classes, stay at home mothers and SMEs are bearing the brunt of the pain from George Osborne's March budget tax changes.
The Commons Treasury Committee had asked for tax experts to give their views on whether the budget met the principles of fairness, support for growth, certainty, simplicity, stability, practicality and coherence according to a Telegraph report. The resulting report for MPs debating the Finance Bill says that it was unfair in that it hit those families on annual incomes of between Â£40,000 to Â£50,000, with stay at home parents who gave a partner in the higher rate tax bracket faring the worst.
Their view overall was that the middle earners had had their tax credits and child benefit payments taken away as well as freezing their tax bands, which therefore had a disproportionate effect on them.
The report will also tell the MPs that the very broadly written and 'highly complicated' anti tax evasion measures introduced in the budget could also end up bringing small businesses into the firing line whilst the big wealthy individuals and companies will be able to continue to hire expensive accountants that allow them to remain untouched.
The tax experts have also criticised the surprise North Sea oil and gas operations tax hike as well as the banking levy as they both fail the test of stability. “The constant changes to the levy need to end: if it is to be brought in, it needs to be settled and banks given some assurance about their long-term tax regime" they said of the banking levy and on the North Sea tax they said “The last minute and precipitate change in oil tax rates for an industry that is particularly dependent on long-term planning seems wrong”.
The Telegraph quoted a Treasury spokesman as saying "The Finance Bill includes measures to promote growth and fairness. Dealing with the deficit is a vital precondition for growth, but the Government has been clear that those with the broadest shoulders should bear the greatest burden.
"Anyone earning under Â£35,000 is better off as a result of the direct tax changes which came into effect last month."
But what about those earning much greater amounts that appear to have got off scot free?