The Budget is coming

The rate at which people start paying tax will rise by £1,000 in the Budget but ministers face likely criticism over tax rises and cuts elsewhere.

Nearly 900,000 people earning less than a £7,475 will pay no tax under plans set to be announced by Chancellor George Osborne on Tuesday.

Mr Osborne will say his deficit-cutting package will be “tough but fair” and that the better-off will pay more.

But Labour say the poorest will be hit and cuts are ideologically driven.

Mr Osborne will deliver his and the coalition government’s first Budget at 1230 BST (1130 GMT), fulfilling the Conservatives’ pre-election pledge to hold a Budget within 50 days of coming to office.

Mr Osborne has said the Budget will set out “tough” but necessary plans to bring down borrowing over the next four years and how this will be divided up between spending cuts and tax rises.

The government says borrowing levels inherited from Labour – which are set to total £155bn this year – are unsustainable and delaying action will damage market confidence in the UK and store up worse financial problems for the future.

He is expected to announce a number of revenue-raising measures, including a levy on bank profits, an increase in capital gains tax and rises in cigarette and alcohol duties while a change in aviation tax is also expected.

But opposition, unions and employer groups have all expressed concerns about the steps being planned amid continuing speculation of a rise in VAT and a freeze on public sector pay beyond the one-year already planned in 2011-2012.

The BBC’s Political Editor Nick Robinson said the government’s plans to raise personal tax allowances will take an estimated 880,000 people out of the tax system and give basic rate taxpayers a tax cut of £200 per year.

But he said it will be clear from the chancellor’s statement that overall people in all income groups will pay more as a result of other tax rises, spending and benefit cuts and limits to public sector pay and pensions.

However, he has said it is “far from certain” that VAT will rise from its current 17.5%.

but how do you feel about the projected budget cut