Tax Relief & Benefits - Paying For It 2011

Tax Relief & Benefits: £28.4bn

November 23rd, 2011

Tax relief and benefits include working tax credit which is a benefit for people who work on a low income while child benefit is assistance for low earning families.

Remove child benefit from higher rate taxpayers

Currently everyone with a child under 16 can claim £20.30 a week and £13.40 for each other child. Remove the entitlement from higher rate taxpayers.
Pros & Cons

PRO This saving will not only contribute towards reducing the national debt but will ensure benefits are paid according to need.

CON Middle income families maybe more squeezed as they will see a drop in their income alongside higher rate taxpayers.
Reduce support for childcare

Reduce the state assistance on childcare for low waged parents to 50% of costs.
Pros & Cons

PRO The savings gained will contribute towards reducing the national deficit.

CON Cutting the support could reduce the number of parents returning to work after having children which would impact the size of the country’s workforce.
Increase support for childcare

Increase the state assistance on childcare for low waged parents from 70% to 80% of costs.
Pros & Cons

PRO Increasing the financial assistance for low income families will help them return to work and may help prevent child poverty.

CON Increasing the support to 80% could reduce the incentive to shop around for the best priced childcare as parents only pay 20% of the bill.
Increase support for low income earners

Increase working tax credits to £1,920 a year for those who receive basic tax credits and £790 a year for those who receive tax credits for working at least 30 hours.
Pros & Cons

PRO This would stop the spending power of working tax credits from being eroded by a rise in prices and would give more support to those on lower incomes.

CON Increases in inflation would create a big spending pressure on Government to financially assist those already in work.

Submit your own policy

Do you have a better idea for a policy? Submit it in the text field below. (You still have to select one of the above choices). All ideas will be compiled with the most popular getting published in the Youth Budget 2012.

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Tax Relief & Benefits: £28.4bn

Remove child benefit from higher rate taxpayers

Reduce support for childcare

Increase support for childcare

Increase support for low income earners

Submit your own policy

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