COVENTRY MESSAGE BOARD

Families with children where one parent works will be hardest hit by new tax changes that come into force on Saturday, according to shadow chancellor Ed Balls, who says gains from a higher personal allowance of nearly £10,000 are "swamped" by higher VAT and cuts to tax credits.



Balls said prime minister David Cameron had prioritised tax cuts for millionaires over "squeezed" workers after new figures commissioned by the Labour party from the Institute for Fiscal Studies (IFS) show that a one-earner family with children will lose an average of just under £4,000.

The thinktank's data shows that a couple with children, where one parent works, will be worse off by £3,995.65 a year on average after the tax and benefit changes introduced since 2010. Average households will be worse off by £891 a year.

Balls highlights a series of changes that will be introduced with the start of the new financial year. These include a freeze in child benefit for a third year and an increase in tax credits by just 1%. The personal allowance will increase to £9,440 although the higher threshold will fall to £41,450 to help pay for this.

Labour argues the figures show the government has the wrong priorities because the tax changes include a cut in the top rate of income tax from 50p to 45p. This will give 13,000 people who earn more than £1m an average tax cut of £100,000. The change will benefit 267,000 people earning £150,000-plus a year.

The shadow chancellor said: "These figures show the full picture David Cameron and George Osborne do not want you to see. They reveal that any gains ministers boast about from the rise in the personal allowance are swamped by higher VAT, cuts to tax credits and child benefit.

"People in work, people looking for work, stay at home mums and pensioners hit by the granny tax are all being squeezed like never before. Millions are paying more while millionaires pay less."

The IFS data shows that lone parents will also be hit by the changes. A lone parent in work will be worse off by £1,225.95 a year while a lone parent out of work will lose £1,206.50. Couples with children where both parents work will be worse off by £1,869.09 while a similar couple with no children will lose £672.10.

Read more: http://www.guardian.co.uk/politics/2013 ... s-ed-balls

Hundreds of bankers to save average £54,000 a year through tax cut

Hundreds of millionaires working in Britain's banks will save an average of almost £54,000 when the top rate of tax is cut this weekend, according to figures compiled by the Labour party.

The changes mean that 643 bankers, each earning more than £1m, could get a combined tax cut worth at least £34.6m.

Labour's figures were derived from details of published accounts by banks showing the number of employees earning more than £1m in the past year. It is not known what proportion of these – other than the employees of HSBC – currently pay taxes in the UK.

But the figures suggest that if they received the same remuneration in the tax year that starts on 6 April, the 40 highest paid senior executives in the major UK banks would get a combined tax cut worth almost £4m – an average of £99,694 each under the coalition's plans to reduce the top rate of tax from 50p to 45p from Saturday, if they are domiciled in Britain for tax purposes.

Labour is hoping to exploit the apparent unpopularity of the tax cut for the rich by highlighting how much one of the Britain's least popular professions stands to benefit.

The coalition insists the tax cut announced in the budget last year follows research showing the 50p rate was not raising adequate revenue. They also point to the increase in the tax-free personal allowance at the bottom end of the scale as a sign of how much the coalition is doing for the ordinary taxpayer.

The Labour research suggests even bankers in the state-backed banks of RBS and Lloyds are set to get a tax cut of more than £7.5m per year – an average of £63,686 each.

Read more: http://www.guardian.co.uk/business/2013 ... ve-tax-cut