CIOT: The 10p tax rate: MPs point the way forward
The report by the Treasury Committee of MPs Budget Measures and Low Income Households points the way forward over the 10p tax rate.
The Low Incomes Tax Reform Group (LITRG) welcomes the Committee’s recommendation that the Government should identify and compensate fully the 1.1 million households who are still losing out from the removal of the 10% starting rate of income tax.
The LITRG endorses what the Committee says about the need to take Budget decisions not in isolation, but having regard to other policies in the tax and benefits systems, and to the Government’s objective to eliminate poverty. Proper consultation, as with all changes to the tax system, is the key.
Robin Williamson, LITRG’s Technical Director, says: “The debate over the withdrawal of the 10% starting rate has shown how important it is, when introducing new policies, to take account of all the knock-on effects on individuals’ and households’ finances. Introducing a measure, however well-intentioned, can undermine efforts elsewhere in the tax and welfare systems to combat poverty, unless the full implications for all other policy areas are carefully studied beforehand. For that reason the Government must take the Committee’s recommendations very seriously.’
-ENDS-
For press information contact Simon Goldie on 020 7245 4122 (direct line), 07879 497316 (mobile). Email sgoldie@ciot.org.uk
Notes to Editors
The LITRG is an initiative of The Chartered Institute of Taxation.
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