Robin has welcomed new figures showing further cuts to income tax announced this week by the Chancellor that will take an estimated 2,153 low-earners out of paying income tax altogether, as well as reducing income tax for 45,362, helping working people keep more of what they earn.
In today’s Budget, the Chancellor announced that the personal allowance – set to reach £11,000 from April this year – will rise again to £11,500 from April 2017, meaning a typical basic rate taxpayer will be paying over £1,000 less income tax than when we came to office in 2010.
The Chancellor also announced that the threshold for the higher rate of income tax would increase from the £43,000 it is set to rise to this April, to £45,000 in April 2017 – a tax cut of over £400 for middle Britain. This will lift over half a million people on middle incomes – people who should never have been paying the higher rate – out of the higher rate tax band altogether.
As a result of these changes, over 31 million people will see their income tax cut compared to this year, while 1.3 million of the lowest paid will be taken out of income tax altogether.
This demonstrates that we are well on our way to delivering on our manifesto commitment to raise the tax-free personal allowance to £12,500 and the higher rate threshold to £50,000 by the end of this Parliament.
Robin spoke up in the last Parliament for raising the income tax threshold to £11,500 so that someone working full time on the minimum wage would be taken out of tax altogether, the increase to the national living wage will mean that this will take longer to achieve but in effect his ambition has been accepted by the Chancellor and the higher threshold he called for will be delivered next year.
“As Conservatives we know that the best way to make families more secure is to help people keep more of what they’ve worked hard to earn and ensure our country lives within its means.”
‘That’s why, since we came to government in 2010, we’ve been cutting income tax at the same time as reducing the deficit. I welcome the Chancellor’s announcement that we will go even further, lifting an estimated 2,153 people in Worcester out of paying income tax altogether at the same time as cutting taxes for over 31 million people across the country.”
“I have long argued that to really make work pay we should be taking more people out of tax and whilst I supported the move to a £10,000 threshold under the Coalition I was always pushing for the Government to go further. The combination of a higher threshold and higher wages through the move to a national living wage will mean every working family in Worcester should be better off.”
‘This is the path that has delivered us one of the strongest economies in the world, and in the face of risks in the global economy, it is the path we must continue on to provide a secure future for the next generation.’
Notes to Editors
Robin Walker first called for a threshold of £11,500 in a speech in April 2013 where he also suggested linking the income tax threshold to a higher minimum wage – this can be found here:
Information from the 2016 budget:
- Personal Allowance set to rise to £11,000 this April. As announced in the Summer Budget 2015, the personal allowance is set to rise to £11,000 this coming April and the higher rate threshold will rise to £43,000 (HMT, Summer Budget 2015, link).
- Budget 2016 will see the personal allowance rise further in 2017. In this week’s Budget, the Chancellor has announced that the personal allowance will rise to £11,500 from April 2017, while the higher rate threshold will rise to £45,000. Compared to the start of the Parliament in 2015/16, this will see over 31 million people benefit from a tax cut, while over 1.3 million will be taken out of income tax all together and 585,000 people will be taken out of the higher rate (HMT, Budget 2016, 16 March 2016).
- We have committed to raise the personal allowance to £12,500. By the end of this Parliament we will raise the personal allowance to £12,500. This is being delivered Budget by Budget, achieved in full by April 2020 at the latest. It will take a million people out of paying income tax, and means no one working 30 hours a week on the minimum wage would pay any income tax (The Conservative Manifesto 2015, link).
- And to raise the higher rate threshold at which people pay the 40p tax rate to £50,000. By April 2020 we would increase the rate at which people pay the higher rate of tax to £50,000 (The Conservative Manifesto 2015, link).
- These estimates are modelled using regional statistics from HM Treasury and ONS constituency population statistics. The figures estimate the number of people who will benefit from lower income tax, as well as the number who will be taken out of tax, by a rise in the personal allowance to £11,500 and a rise in the higher rate threshold to £45,000 in 2017/18 compared to the beginning of this Parliament (the current financial year) in 2015/16.
|Constituency||Gain in 2017/18 since 2015/16||Taken out of tax by 2017/18 since 15/16|