Families £891 worse off from April, new figures show

Green Politics

Families will be an average of £891 worse off from next week because of tax rises and cuts to tax credits and benefits introduced since 2010, according to new figures.

Families will be an average of £891 worse off from next week because of tax rises and cuts to tax credits and benefits introduced since 2010, new figures suggest.

Changes to tax, tax credits and benefits since 2010 will mean that families are £17 a week worse off in the 2013/14 financial year, according to the figures published by the Labour Party.

Based on data published by the Institute for Fiscal Studies (IFS) in its Green Budget in February and its post Budget briefing earlier this month, the figures show the extent to which living standards are being squeezed by George Osborne’s policy of austerity.

Meanwhile, from 6 April, 13,000 people earning over £1 million will receive an average tax cut of £100,000.

The measures coming in next month include:

From Monday 1 April, changes to council tax and housing benefit will mean:

  • 2.4 million families on low incomes will pay on average £138 more in council tax in the year 2013/14 as a result of cuts to council tax benefit, according to the Joseph Rowntree Foundation.
  • 660,000 people will lose an average of £728 per year or £14 a week as a result of the bedroom tax, according to figures from the IFS.

From Saturday 6 April, changes in the new tax year include:

  • the top rate of income tax will be cut from 50p to 45p. This will benefit 267,000 people earning over £150,000, including 13,000 people earning over £1 million who will receive an average tax cut of £100,000, according to figures from HMRC.
  • child benefit will be frozen for a third year, while tax credits and other working-age benefits will be increased by just 1 per cent. These real terms cuts will affect 9.7m households, of which 7.3m (or 75 per cent) are working households according to the IFS.
  • the personal allowance for those aged under 65 will rise to £9,440 but the higher rate threshold will fall to £41,450.
  • changes to the age-related allowance – the so called ‘granny tax’ – will see 3.6m pensioners lose £68 a year and 360,000 people turning 65 this year lose £268, according to the IFS.

No related posts.

87 Responses to “Families £891 worse off from April, new figures show”

  1. Barbie

    The figures about the tax benefit of the 50p tax cut are from the HMRC. If you so choose look online.

    By the way, as for the IFS here is a quote attributed to Paul Johnson, Director of the Institute for Fiscal Studies (IFS)
    “We know pretty much for sure that the increase in the personal allowance will cost about £3.5 billion in 2014-15. We do not know with anything like such certainty that the cut in the 50p rate will cost only £100 million. We do not know that the proposed caps on tax reliefs will bring in the £300 million or so the Chancellor is banking on. Nor do we know that the stamp duty changes will raise the nearly £300 million that he has pencilled in”,

  2. Stephen Wigmore

    Either way there is no net tax-cut for the rich. So my point still stands. Implying there has been some massive tax-giveaway for the super wealthy is just wrong.

  3. Stephen Wigmore

    No. Because due to people changing their behaviour under the higher rate, the actual lost tax will be around £100 million. And other taxes have been raised on the very rich that are worth much more than that.

  4. Ken

    The figures from HMRC do suggest otherwise.

  5. con

    Somebody needs to learn some maths. 5% tax cut on £1million is not £100,000. Given it’s above £100,000 it’s not even £50,000, it’s more like £45,000.
    But other measures that hit this income bracket were also introduced.
    Listening to too many dozy milipede marxist sound bites.
    And don’t forget, even the 45% rate is 5% higher than was ever actually charged by labour.

Comments are closed.