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REBECCA BENNEYWORTH provides a rundown of changes to tax credits
KEY POINTS
- Tax credit claims to be replaced by a single Universal Credit
- Taper rate for main tax credits to increase from 39% to 41%
- Award structure for tax credits also changing
- Families where main earner is self-employed likely to lose out most
The Government has stopped short of wholesale reform of the tax credit system in the changes it announced last June tinkering instead with rates and thresholds to reduce the cost of tax credits – albeit by a small margin on the £30 billion a year they currently cost – and stop wealthy families’ entitlement to those benefits.
It is possible that some of these changes will be overtaken by events when a single universal benefit known as universal credit is introduced from late 2013 which is expected to replace tax credit...
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