Very low earners 'still losing out'

News Article - Tuesday, December 02, 2008

filed under: Regulatory

Very low earners are "still losing out" despite the changes announced in the pre-Budget report (PBR), according to the Chartered Institute of Taxation (CIOT).

John Whiting, chairman of the institute's management of taxes committee, explained that the group's low income tax reform group has been campaigning to make sure people who lost out with the removal of the 10p tax band are compensated.

He said that the increase in personal allowance from next April will leave people in credit compared to when the band existed, although some will be "better compensated than others".

"At least now, or certainly from next April, everybody will be ahead as it were compared to where they were under the 10p regime," he added.

However, he said that people with incomes between roughly £8,000 and £10,000 "are still left losing out".

He concluded: "Very low earners, particularly part-timers, are still losing out."

The PBR, announced by the chancellor of the exchequer Alistair Darling last week, contained a number of measures to help the economy through its current difficulties.