Chancellor George Osborne said he would use his 2012 budget to help those at the bottom of the earnings ladder, hinting he could go further in lifting more people out of paying income tax.
Osborne also said on Sunday the euro zone crisis and high oil prices posed a threat to the global economy.
My priority is to help low and middle earners. That is where the bulk of the effort in the budget is going to be, he said on BBC television. We want to see real and substantial progress on lifting low income people out of tax.
Osborne, under pressure to revive a stagnant economy with rising unemployment and a squeeze on household incomes, was expected to present a neutral budget on Wednesday, sticking to a tough austerity plan which critics say has stalled Britain's recovery from the global financial crisis.
Government officials have indicated economic forecasts for growth and government borrowing which underpin the budget will remain broadly in line with Osborne's so-called autumn statement in November, when the growth outlook was revised sharply lower.
Any effort to accelerate progress in raising the income tax threshold towards or above a 10,000 pound ($16,000) goal agreed between Conservatives and Liberal Democrats in the coalition government could allow Osborne to removed a 50 percent income tax rate on high earners.
Osborne, singling out a tax paid on house purchases, said he would launch a crackdown on tax avoidance - an area often cited by governments for savings but treated with scepticism by economists.
People have had their warning - they have got to pay stamp duty on the homes they live in, he said. And we are going to deal with that in a very aggressive way.
With three years still to go before the next election - time for the economy to improve before voters have their say - Osborne's team have calculated they do not need to panic yet or abandon their austerity plan.
Headwinds remain - such as high oil prices and problems in the euro zone - threatening Britain's economy and, possibly, Osborne's strategy.
Just because the European Central Bank is putting a lot of money into the euro zone does not mean some of the fundamental problems have been resolved and that remains a major risk to the UK and the rest of the world, he said.
The government will extend store trading hours on Sundays during the 2012 Olympics in an effort to capitalise on a larger than usual influx of tourists over the summer, hoping to give the economy a further nudge in the right direction.
The opposition Labour's finance spokesman Ed Balls, also speaking on the BBC, said the government should act immediately to soften its austerity stance to boost growth.
On the big judgments - going too far too fast, the top rate of tax, do we need action now on jobs - the arguments we have made are in line with public opinion, Balls said.
($1 = 0.6312 pound)
(Editing by Dan Lalor)