Caroline Flint

Standing up for Don Valley.

Families lose out from tax changes

Families with children will lose an average of £511 a year from changes to tax, benefits and tax credits being introduced this week, according to new figures from the Institute for Fiscal Studies being highlighted by Doncaster’s Labour MPs today.
The analysis follows last month's Budget and is on top of tax rises already introduced, like last year's VAT rise which is costing a family with children an average of £450 per year. 
New government figures obtained by Labour also show that over 5,000 families in Doncaster could lose all of their Child Tax Credit or Working Tax Credit from this week:
•         4,500 families on modest and middle incomes will lose all of their Child Tax Credit – worth around £545 per year.
•         And up to 960 working couples earning less than around £17,000 per year will lose all of their Working Tax Credit – worth up to £3,870 per year – if they cannot increase their working hours.
Figures also uncovered by Labour reveal that, following this week’s changes to working tax credit, a couple with two children on the minimum wage will be better off quitting their jobs if they cannot work at least 19 hours per week.
The IFS figures also show that government policies mean pensioners will be an average of £315 a year worse off from April 2014 once cuts to their allowances announced in last month’s Budget – what has been dubbed the 'granny tax' – have kicked in.

Caroline Flint said:
“Doncaster families on middle and low incomes are facing a tax credits bombshell from David Cameron and George Osborne.
“For all the government’s talk about increasing the personal allowance, these independent figures show that while they may be giving one with one hand they are taking much more away with the other hand. That is why families with children will be an average of £511 a year worse from this week.
“There do need to be tough decisions on tax, spending and pay. But why are people earning over £150,000 soon to get a £3 billion tax cut from this out of touch government while parents on middle and modest incomes in Doncaster are being clobbered?”
Rosie Winterton said:
“It cannot be the right priority to make thousands of families and pensioners pay more so millionaires can pay less – over £40,000 less in the case of the 14,000 richest people in the country. And it cannot be right to leave working parents trying to do the right thing better off if they quit their jobs.
“It is no wonder that the Chancellor cannot bring himself to say the words 'we're all in this together' again. His empty slogan has been exposed by the reality of his policies which are hitting women harder than men and hitting families with children hardest of all. And these cuts to tax credits for parents on middle and low incomes are breaking yet another promise David Cameron made during the general election campaign.”
Labour Leader, Ed Miliband, added:
“This government’s policies aren’t just unfair, they’re also not working on jobs, growth or the deficit. With the economy flatlining, unemployment soaring and £150 billion of extra borrowing to pay for this economy failure, raising taxes and cutting spending too far and too fast has backfired.
“Instead of cutting the top rate of tax for the richest and giving the highest earners a £1.6 billion tax cut on their pensions, the government could stop these unfair and perverse changes hitting parents in Doncaster.
“We need a plan for job and growth, like Labour’s five point plan, to get our stalled economy moving again, get Britain back to work and get our deficit down.”
1. Figures from the independent Institute for Fiscal Studies can be found at: These tables have just been updated, at Labour’s request, to include for the first time cash figures of the net loss or gain from changes taking effect from April 2012 and April 2014.
2.  The two main changes to tax credits being introduced from this week are a reduction in the income limit for Child Tax Credit from around £40,000 to around £26,000 for a family with one child and an increase in the number of hours couples with children have to work to be eligible for Working Tax Credit from 16 to 24 hours per week. Details of the changes can be found on HMRC’s website here:


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