Treasury concedes tax credits point
Many will not take up the credits that the Treasury claimed would compensate for the loss of the 10% tax rate
Few people are set to claim improved working tax credits announced in last
week’s Budget, the Treasury has admitted, undermining its claim that the credits
would compensate for higher tax bills brought about by the abolition of the 10%
income tax band.
The chancellor has been
criticised for the
‘regressive’
abolition of the tax rate.
Mark Neale, speaking to MPs at the Treasury Select Committee yesterday, said
the department was assuming ‘take-up rates in line with the current rate,’
The
Times reported.
About two million of the seven million people entitled to claim the working
tax credit and child tax credit do not do so.
Further reading
Income
tax reforms ‘will hit low earners’
The Budget aftermath: life
after Gordon