Tax ‘windfall’ story overlooks £4.4 billion cuts for the poor
Today’s front page is jubilant:
“MILLIONS WILL GET TAX WINDFALL”
We’re told ‘experts’ have pointed out six ways people can benefit from tax changes set to come into effect in April next year.
These include raising of the personal allowance and personal savings allowance, tax-free share dividends for the first £5,000 of dividend income, and easier access to your pensions. Good news for people with savings, share dividends and pensions, but what about the rest of us?
Because there is another change coming in April, namely £4.4billion of cuts to people’s tax credits.
While it lifts taxes for people on middle incomes through the measures above, the government wants to cut the income threshold for working tax credits from £6,420 to £3,850.
According to the independent Institute of Fiscal Studies (IFS), this means 3 million people on the lowest incomes will be £1,300 worse off each year, as anyone who earns £3,850 will see their tax credit payments reduced.
The plans have caused a huge rift in the government, with senior ministers speaking out against the cuts and a huge defeat in the House of Lords with peers voting to delay the changes.
You wouldn’t know any of this from today’s Express splash, which fails to mention tax credit cuts at all.
This ‘tax windfall’ will fall hardest on the poor, and like a Daily Express weather story, is a load of hot air.
Adam Barnett is a staff writer at Left Foot Forward. Follow MediaWatch on Twitter
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