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[AtW]

The so-called “quad” which negotiates Coalition agreements is due to meet on Monday evening to continue detailed discussions over next month’s budget.

Nick Clegg and Danny Alexander will attend for the Liberal Democrats and will push demands for the Coalition to accelerate its plans to move “further and faster” in increasing the level at which income tax becomes payable to £10,000.

Sources said that the Liberal Democrats are working on detailed plans on how the tax cut can be funded, and these will be presented to the Conservatives.

The centrepiece will be a new crackdown on tax avoidance, including plans for a “catch-all” law which would mean that HM Revenue and Customs can claw-back any money saved from “artificial”, but currently legal, tax dodges.

However, as disclosed in The Daily Telegraph, the Liberal Democrats are also pushing to reduce the tax relief offered to wealthier Britons saving money in a private pension.

Mr Alexander has suggested that higher-rate taxpayers only receive basic rate relief on their pension contributions. Mr Osborne is understood to have signalled his opposition to the plan.

However, the Liberal Democrats are now thought to be working on a “compromise” proposal which would see those earning more than £100,000 stripped of higher-rate tax relief on their pension contributions. This would still save taxpayers £3.7 billion annually, according to Treasury figures.

Treasury officials are also attempting to try and help stay-at-home mothers penalised by the planned withdrawal of child benefit for higher-rate taxpayers next year.

The Conservatives are unable to introduce new tax cuts for married couples in this year’s budget. The 50p higher rate of income tax will also remain.

However, if Mr Osborne backs Liberal Democrat plans to accelerate the introduction of a £10,000 tax-free allowance, Mr Clegg and Mr Alexander may allow tax breaks for married couples to be introduced in 2015 before the election.

This year’s budget negotiations between the two parties are far more open than in the past after Mr Clegg went public with his demands for tax cuts. The quad is expected to meet at least once a week in the run-up to the budget on March 21st.

The Liberal Democrats are also thought to be in favour of new green taxes, which are also unpopular with many Conservative MPs and the Chancellor.

Source: Coalition holds crunch talks on new taxes for the wealthy - Telegraph