The government’s approach to making working more worthwhile for families

I have been sent a reminder of changes coming in this April.   We want to support people in work, as well as ensure the welfare system works as a safety net for those who need it.

The measures include:

 A further increase in the Personal Allowance to £11,500; an increase of over 70% since 2010. Since the start of this Parliament we have cut income tax for 31m people and taken 1.3m of the lowest paid out of income tax altogether.

 Increasing support for low earners by raising the National Living Wage to £7.50.

 Helping working parents with childcare costs by launching Tax Free Childcare from 28 April – saving working parents up to £2000 per year for each child under the age of 12.

 Increasing income for 3 million households by reducing the Universal Credit  taper rate from 65 per cent to 63 per cent.

 Investing £330m in practical employment support to help disabled people back into work.

 Helping savers with the launch of a new NS&I bond offering a market-leading interest rate of 2.2% and increasing the annual ISA limit to £20,000.

 

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7 Comments

  1. Simon Platt
    Posted April 12, 2017 at 11:42 am | Permalink

    Increasing personal allowances is a Good Thing. I gather that it was UKIP policy long before it was Tory policy. But where are transferable tax allowances? And subsidising families with two earners is a Very Bad Thing, and utterly counter-productive.

    This is actually quite a depressing post, as it reminds us just how much government interferes in family life, as if Government Knows Best, and is condescending to give us some of our money back to spend on our families, so long as we spend it in the Approved way.

    • Phil
      Posted April 22, 2017 at 10:47 am | Permalink

      And if housing supply somewhat matched demand and we were much closer to mid 90s average house-price to salary ratio, Government Knowing Best would be of far less consequence.

  2. Lifelogic
    Posted April 23, 2017 at 6:12 am | Permalink

    But they have abolished child benefit and personal allowances completely for many and still have income tax at 45%, they have still ratted on IHT, they have introduced loads of other back door taxes and even tried to introduce a new IHT probate tax on top of IHT. They are just tax borrow and piss down the drain socialist in essence. Not quite as bad as the alternatives is the best one can say for them.

  3. Narrow Shoulders
    Posted April 23, 2017 at 10:20 am | Permalink

    Higher rate threshold raised by £1,500 in April 2017 allowing higher rate payers to keep £300 of their own money annually. Trumpeted and trailed to show a low tax Tory government.

    Upper earnings limit for NI raised by £2,000 in April 2017 clobbering higher rate tax payers by £200 annually unmentioned in the media (mainly self employed hence the outcry about their NI raid) showing try government committed to tax and spend.

  4. Narrow Shoulders
    Posted April 23, 2017 at 10:21 am | Permalink

    Higher rate taxpayers are not rich but are a target for milking by the tax system.

    As your government continues to import cheap labour causing hikes in housing prices and all other living costs the higher rate threshold is becoming ever less indicative of a comfort level. Especially given that many households earn two wages below the higher rate threshold and so get the benefit of persona allowances and 20% tax way in excess of the higher rate. Time to reintroduce the married (household) allowance to transfer tax allowances within a recognised household.

    There must also be a fairer way to determine who is allowed to receive child benefit from a household income perspective and also from a number of children perspective. The savings could be more easily achieved by capping the allowance at two children rather than an earning limit.

  5. Narrow Shoulders
    Posted April 23, 2017 at 10:27 am | Permalink

    As for making work worthwhile fr working families, the proposed working would if I could get on the merrygoround allow me to take home £36K per year on a minimum wage job.

    I am a higher rate tax payer who, after commuting costs, does not get to keep £36K of my earned income per year but has to compete with someone who is takes home £36K through universal credit for my housing and other living costs.

    I suggest your government addresses these kid of iniquities urgently. I would take redundancy tomorrow to get on universal credit and be better off with fewer responsibilities in a minimum wage role, maybe I could become self employed and earn minimum wage.

    • Narrow Shoulders
      Posted April 23, 2017 at 1:56 pm | Permalink

      The proposed Universal Credit not proposed working (apologies)

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    John Redwood won a free place at Kent College, Canterbury, He graduated from Magdalen College Oxford, has a DPhil and is a fellow of All Souls College. A businessman by background, he has been a director of NM Rothschild merchant bank and chairman of a quoted industrial PLC.

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