Monday, 7 April 2008

What the abolition of the 10p band means

Further to my post on Saturday, some further research has been published showing what the abolition of the 10p tax band actually means to millions of ordinary people. The Treasury has confirmed that 5.3 million families will lose out in total – even when the changes to tax credits are taken into account, meaning one in every five families will be worse off.

But who are these people and how much will they lose out by? The largest group who will lose out are the 2.2 million single working people with no children who are not getting the working tax credit, because they earn more than £12,500 but less than £18,000, or because they work fewer than 30 hours. They lose about £300 per year on average per family. Other losers include the 1.2 million two earner couples with no children, who may not qualify for the working tax credit, or they may fail to take it up, or because they both lose from the income tax and national insurance changes but there is only one gain from the tax credit which is assessed on the household; and 0.3 million women between the ages of 60 and 64 who do not get tax credits and are too young to be compensated by the rise in the pensioner tax allowance.

So much for these changes being introduced to help lower income groups. David Cameron has this morning promised to challenge the Government on this issue and try to persuade them to re-think this ludicrous policy. I am glad he is going to try but I doubt they will listen.


Anonymous said...

I am 71 year old retired pensioner. Personal allowance 9030 less state pension 5371 leaves tax-free amount 3659. I have a modest private pension 4832 which means I have to pay 20% of 1173. This means I am now 117 pa WORSE OFF!!!

Anonymous said...

Snodland Labour Party has always been self-centred. Mr Laverty's comments prove that they haven't changed. Labour lost because they believe that they are more important than the people of Snodland!

This attitude goes all the way to the heart of Labour Government!Great Britian started seeing the light 2 years ago, long may it continue

Brian said...

Also, eligibility for Working Tax Credits only starts on one's twenty-sixth bithday. Why?

Joseph said...

It's good to know the meaning of abolition of the 10p band. Thanks for sharing.

sr&ed tax credit