Tax and benefit changes taking effect in April will amount to a ‘net takeaway’ from households, equivalent to £200 per household, on top of this month’s increase in indirect taxes which was equivalent to £480 per household on average, according to the Institute for Fiscal Studies.
Tax and benefit changes taking effect in April will amount to a ‘net takeaway’ from households, equivalent to £200 per household, on top of this month’s increase in indirect taxes which was equivalent to £480 per household on average, according to the Institute for Fiscal Studies.
‘The biggest losers are the very richest households, who are particularly affected by the restriction on the amount that can be contributed to a private pension,’ the IFS said.
‘This comes in addition to the introduction of the 50p income tax rate applying above £150,000 and the withdrawal of the income tax personal allowance above £100,000 that were introduced in April 2010. Working couples with children also lose significantly from cuts to tax credits.’
The IFS report found that the number of individuals paying the higher 40% rate of income tax will increase by 750,000.
It added: ‘If the government were to realise its ambition of setting the personal allowance at £10,000 and again wished to prevent higher-rate taxpayers from benefiting from this by reducing the higher-rate threshold, the number of higher-rate taxpayers would increase by a further 850,000, but one million people would be taken out of the income tax system altogether.’
Tax and benefit changes taking effect in April will amount to a ‘net takeaway’ from households, equivalent to £200 per household, on top of this month’s increase in indirect taxes which was equivalent to £480 per household on average, according to the Institute for Fiscal Studies.
Tax and benefit changes taking effect in April will amount to a ‘net takeaway’ from households, equivalent to £200 per household, on top of this month’s increase in indirect taxes which was equivalent to £480 per household on average, according to the Institute for Fiscal Studies.
‘The biggest losers are the very richest households, who are particularly affected by the restriction on the amount that can be contributed to a private pension,’ the IFS said.
‘This comes in addition to the introduction of the 50p income tax rate applying above £150,000 and the withdrawal of the income tax personal allowance above £100,000 that were introduced in April 2010. Working couples with children also lose significantly from cuts to tax credits.’
The IFS report found that the number of individuals paying the higher 40% rate of income tax will increase by 750,000.
It added: ‘If the government were to realise its ambition of setting the personal allowance at £10,000 and again wished to prevent higher-rate taxpayers from benefiting from this by reducing the higher-rate threshold, the number of higher-rate taxpayers would increase by a further 850,000, but one million people would be taken out of the income tax system altogether.’
.tmb-editorspic.jpg?sfvrsn=c9a7a0cc_1)
