CIOT: Personal allowance commitment “a worthwhile boost to the incomes of the lower paid”
The Low Incomes Tax Reform Group (LITRG) has welcomed the confirmation that the personal income tax allowance will rise to £10,000 for 2014/15.
Anthony Thomas, Chairman of LITRG said:
“The projected increase in the basic personal allowance to £10,000 from 2014/15 will be a worthwhile boost to the incomes of the lower paid and is very welcome.”
In previous years LITRG has warned1 that many benefit recipients only receive a fraction of the benefit of personal allowance increases. This is because of the way in which tax reductions interact with means-tested benefits based on the claimant’s net income.
Anthony Thomas continued:
“Taxpayers who are in receipt of means-tested benefits which are calculated on net income have not seen the full benefit of tax reductions in recent years. While most people on incomes of £10,000 or more are no longer receiving means-tested benefits, the introduction of universal credit may well change the picture quite significantly as the new benefit is paid to people higher up the income scale. This is something we will keep a close eye on.”
Notes for editors
1. LITRG has pointed out that if a welfare payment is based on after-tax income, then the lower the tax bill the higher the income figure on which benefit entitlement is based. Consequently, the lower the benefit entitlement becomes – indeed recipients of, say, housing benefit may only see 15% of any tax reduction because of that interaction.
The Low Incomes Tax Reform Group (LITRG) is an initiative of the Chartered Institute of Taxation (CIOT) to give a voice to the unrepresented. Since 1998 LITRG has been working to improve the policy and processes of the tax, tax credits and associated welfare systems for the benefit of those on low incomes.
The CIOT is a charity and the leading professional body in the United Kingdom concerned solely with taxation. The CIOT’s primary purpose is to promote education and study of the administration and practice of taxation. One of the key aims is to achieve a better, more efficient, tax system for all affected by it – taxpayers, advisers and the authorities. The CIOT’s 16,500 members have the practising title of ‘Chartered Tax Adviser’ and the designatory letters ‘CTA’.
George Crozier
External Relations Manager
D: +44 (0)20 7340 0569
M: +44 (0)7740 477374
The Chartered Institute of Taxation
Registered charity number 1037771
www.tax.org.uk
The Association of Taxation Technicians
Registered charity number 803480
Registered company number 2418331
VAT Registration Number 497 5390 90
www.att.org.uk
Low Incomes Tax Reform Group – an initiative of the Chartered Institute of Taxation
www.litrg.org.uk
1st Floor, Artillery House, 11-19 Artillery Row, London SW1P 1RT
-01.png){kind=spacer}