Let Down Again
The Chancellor of the Exchequer said today that he would be introducing a tax system which would be fairer for families.
This he has not done.
This is a missed opportunity. MAHM and Tax & The Family are highly critical of today’s announcement by the Chancellor of the Exchequer to abolish the 45p rate and advance to the reduction to 19p in the basic rate of tax next year. He is focussing the tax reductions on those with higher incomes, while very largely ignoring those who pay income tax even though they are in poverty.
Because the tax system is based on individuals, someone’s liability to tax does not reflect their families or their circumstances. One result is that people may pay income tax even though they are in poverty. Over the years we have put forward a number of recommendations as to how this might best be tackled. Past Governments have not pursued these, and today the Chancellor has chosen a measure which will primarily help the better off while not focussing support on those taxpayers who are least well off. Those on Universal Credit will see little difference to their disposable income, any gain made from reducing the basic rate of tax will see a reduction in their credit.
The Chancellor is not allowing people to share their personal allowances as proposed by the Prime Minister during her leadership campaign. This would have been a far more cost-effective way of helping families than cutting the basic rate of income tax or reducing the national insurance rate. The Mini Budget does not make the tax system fairer for families.
MAHM & Tax and the Family
23rd September 2022
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