Anne Redston, chairman of personal taxes at the Chartered Institute of Taxation and a tax partner with Ernst & Young, said the child credit and employment credit were still too complicated and ‘have many disadvantages’.
She said a ‘better system’ would be to allow people to keep more of their income through greater peronsal allowances, and lambasted the government for only making the credits available to people with bank accounts.
The personal allowance, she said is ‘less than £5,000 per annum so people on the minimum wage pay significant sums in tax and national insurance, and then need their income topped up with tax credits.’
Redston also claims the system will ‘struggle in the real world’ because of people moving in and out of employment and have a succession of different jobs.
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