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Tax changes ‘leave 18 million families worse off'
Published in The Saudi Gazette on 22 - 05 - 2008

Around 18 million families will be 150 pounds a year worse off on average over the next two years despite last week's emergency budget, experts said on Wednesday, fuelling a political row over government tax policy.
The Institute for Fiscal Studies said Chancellor Alistair Darling would have to repeat his one-off tax cut and top up winter fuel allowances at a cost of 3.3 billion pounds if he wanted to counter the effect of budget measures since 2007.
“By announcing a big one-off increase in the personal income tax allowance, Alastair Darling has not only created millions of winners this year -- he has created millions of potential losers next year,” said IFS Director Robert Chote.
Darling was forced to raise tax allowances last week after a backbench rebellion over the abolition of the 10p starting rate of income tax, which threatened to hit 5.3 million of the poorest households.
The 10p tax row has been blamed for contributing to Labor's rout in local elections this month and has been a key issue in Thursday's Crewe and Nantwich by-election, which polls say Labor is set to lose.
The IFS said 900,000 families would still be worse off despite Darling's action last week.


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