There are likely to be major tax rises once the recession is over, an expert at PricewaterhouseCoopers (PwC) has warned, something that could harm those with debt management issues.
Government borrowing has risen during the recession and both Labour and the Conservatives have said there will have to be spending cuts.
Head of the government and public spending group at PwC John Sison argued that there will probably also be a rise in taxes, although there will be a “breathing space” for a few months to avoid incomes being depressed as the economy is returning to growth.
Beyond this, he suggested, there will be tax rises, stating: “If they do anything on tax it’ll be a mixture of the big three taxes – national insurance, income tax and VAT.”
The VAT rate was trimmed last year to 15 per cent, but will revert to 17.5 per cent at the end of 2009.
Another tax temporarily eased that will return to its previous level from January is stamp duty.
The lowest threshold for this was increased from £125,000 to £175,000 in September 2008.