Delyn MP David Hanson has welcomed the measures announced today by the Chancellor of the Exchequer to raise the personal tax allowance and compensate those that were adversely affected by the changes in the tax system and the abolition of the 10p rate of tax.
The Chancellor announced that, at a cost of £2.7 billion, he will increase the personal tax allowance by £600 to £6035 for this financial year, benefiting all basic rate taxpayers under 65. From September basic rate taxpayers will see a one-off increase in their monthly income of £60 and then an increase of £10 per month for the rest of the financial year.
This will mean that 22 million people on low and middle incomes will gain an additional £120 this year to offset their average loss. The tax liability of everyone that currently pays tax at 40 per cent will be unaffected by the increase in the personal allowance.
David Hanson said:
“I am pleased that the Government has taken the steps needed to compensate those that have been adversely affected by the changes to the tax system and the abolition of the 10p rate of tax.
“These measures will mean that 80 per cent of households are fully compensated with the remaining 20 per cent compensated by at least half. And in addition 600,000 people on low incomes will be taken out of tax altogether.
“This Government is on the side of the low-paid and the vulnerable and although I welcome the changes I will be working hard over the coming months to not only ensure that these specific changes are implemented, but that this Government continues to introduce policies that will benefit the low-paid and hard-working people of Delyn.
“I am sorry for the concern the changes to the tax system has caused and I want to thank everyone that has made representation to me on this issue over the last few weeks.”