Government set to hold crunch tax talks

The coalition government is getting ready to hold decisive talks on changes taxation rates within the UK.

A number of specific issues are expected to be put under the spotlight when leading figures from the Conservatives and the Liberal Democrats meet this week, chief among them raising the level at which income tax becomes payable.

According to the Lib Dems, raising the threshold to £10,000 per year would give many of Britain's lowest earners a much-needed economic break in these difficult times, though opponents of the proposals have questioned how such a tax cut can be funded.

At the same time, the talks, which are set to take place this week, will also address the contentious issues of clamping down on tax avoidance, even if it's done through technically legal loopholes, as well as imposing higher taxes on the nation's highest earners.

According to the Telegraph, the 'quad', made up of leading figures from both parties, is likely to meet up once a week between now and the March Budget, with tax issues always likely to be top of the agenda.

Already, the Lib Dem plans for cutting tax relief on pensions contributions for high earners has generated staunch opposition, with critics warning it runs the risk of over-taxing savers.