Scrap tax on under £40,000 - Souter

BRIAN Souter, the co-founder of the Stagecoach empire, has called on the government to scrap income tax for people earning less than £40,000.

Instead, Mr Souter, whose company runs about 7,000 buses and several rail franchises, said ministers should raise a higher proportion of revenues through indirect taxes, such as road tax and VAT.

He claims the changes would help to create incentives for people to make better consumer choices.

In the budget this month, the Chancellor, Alistair Darling, announced plans to increase tax on bigger cars, but Mr Souter said he should have gone farther.

He said: "There could even be a radical change in the way we are taxed – moving up the level at which people get taxed directly to something like £40,000, so people on low incomes paid no direct tax.

We could also maybe introduce a slightly higher band for those on bigger salaries.

"The tax burden could shift to indirect taxes. Look at VAT. It's at a high level but nobody really notices it now. There is nothing wrong with the move to tax big cars like the big 4x4s. People who can afford them can still afford them if they are made a wee bit dearer."