Parliamentary Search

Written question asked by Baroness Lister of Burtersett (Labour) on Monday, 23 March 2015, in the House of Lords. It was due for an answer on Monday, 30 March 2015. It was answered by Lord Deighton (Conservative) on Thursday, 26 March 2015 on behalf of the Treasury.

Income Tax

Question

To ask Her Majesty’s Government what will be the net gain per pound of the increase in personal allowances announced in the Budget to a taxpayer in receipt of (1) universal credit, (2) other means-tested benefits, and (3) no means-tested benefits.

Answer

As a result of increases to the personal allowance, a typical basic rate taxpayer will be £905 a year better off in 2017-18 compared with 2010-11, in cash terms. A basic rate taxpayer who also receives universal credit will still be better off from the personal allowance increase, as will a taxpayer who receives other means-tested benefits.

Universal Credit will improve work incentives by allowing people to keep more of their income as they move into work. Universal Credit will provide a single deduction rate of 65 per cent: for each £1 increase in post-tax income, 65 pence of Universal Credit will be withdrawn.

The Government believes that increasing the personal allowance is the most effective way to support those on low and middle incomes. It enables people to keep more of the money they earn.

Secondary information

Type
Written question
Reference
HL5928
Session
2014-15
Subjects
Income tax Tax allowances
Contains statistics
Yes
Link
View this Written question on www.parliament.uk