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Tax avoidance adding to UK tax rate

The Treasury has announced that the basic rate of tax could be cut by 2p if people paid the tax they were obliged to. In many cases it is thought that everyone else picks up the tab when the wealthy avoid their obligations.

Such avoidance is within the laws of the UK tax rules in many cases, and exploits loopholes that allow individuals to pay a minimum amount of tax on earnings. An example of this is a tax scheme known as K2, which allows individuals to shelter hundreds of millions of pounds a year from the tax man, and pay income tax rates as low as 1%.

It is an issue that has demanded much attention from Prime Minister David Cameron over the past few weeks, leading him to criticise certain individuals about their use of the system.

The big question is how the public is likely to react to claims that those far wealthier than them are stumping up the tax bill they pay every day by as much as 2%. Former Prime Minister, Tony Blair added that although he is unwilling to criticise individuals, the public would only put up with such avoidance in good times.

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