Every adult in the UK would have to sacrifice their salary for nearly a whole year (341 days) to pay off the country’s estimated £1.2 trillion national debt*, according to RSM Tenon.

RSM Tenon, the seventh largest accountancy firm in the UK, has examined some of the options available to the Chancellor to reduce the estimated £178 billion deficit by a fifth – all of which are likely to be deal breakers so close to a General Election.

Income Tax: Increasing the basic rate of income tax by 1% would raise an additional £3.4 billion but would mean a worker earning the UK’s average salary, would pay an extra £254 in tax each year.

VAT: Raising VAT to 20% could generate £10-12 billion and bring the UK in line with the rest of the EU. This would mean an item such as a television or piece of furniture costing £200 would rise to £204.

Duties: Adding 10% onto wine, beer and spirits would generate £9 billion but would see the duty for wine rise from £1.61 to £1.77, beer from 39p to 42.9p, and spirits from £6.14 to £6.75.

Personal Allowances: Reducing all personal allowances by 10% would raise £3.9 billion but this would leave basic tax rate payers £129 worse off and higher rate payers £324 short each year.

IHT: Abolishing the nil rate tax band so that all monies from any estate would be taxed at 40% would raise an estimated £10 billion, but would leave anyone with an inheritance of £300,000 with a £120,000 tax bill.

Nick Parker, regional director of Tax at RSM Tenon, said: “These figures illustrate the scale of the problem. Big tax increases would still only put a small dent in the overall deficit. UK business needs a reduction in the tax burden not an increase. Allowing business to retain more profit so that they can reinvest in future growth is surely the better option. If businesses are successful then the total tax take goes up, even if the rates go down. Squeezing business hard is not the answer.”