A financial education charity has said tax and benefit changes coming into force today will leave households £200 worse off. Credit Action, a financial education charity, has calculated they will leave households £200 a year worse off.
According to their research reductions to what parents could claim in childcare costs through the working tax credit alone would leave some families worse off by up to £1,560 a year.
Other changes due to come into force today include a £1,000 rise in the threshold at which people start paying income tax - this will mean 500,000 people will be lifted out of paying income tax altogether, a freeze in the inheritance tax threshold, an extra 5% on stamp duty for homes worth more than £1m and restrictions on tax relief on pension contributions for those on more than £150,000 a year.
The government is also cutting childcare support through the working tax credit. The resolution foundation says this will cost 450,000 people, which includes almost 290,000 lone parents, an average of £436 a year. For some families with two or more children it could be up to £1560 lost. This little-noticed change will have a huge impact on hundreds of thousands of families, but particularly mothers who work part time for low pay. Cuts to childcare support make no sense if it simply makes it harder for parents to work – as the office for budget responsibility has warned – and so ends up costing the taxpayer more.
The biggest losers will be those earning more than £35,000, with someone on £50,000 seeing their take-home pay reduced by £500 a year, according to the Institute for Fiscal Studies.
The results of Osborne’s Budget are really quite frightening, especially for the poorer sector of our society. And what are the government doing to help them? Nothing – it seems they are oblivious to the demise of the average man and woman in this country. Understandable really, given that over 20 of the Cabinet are millionaires and have never really experienced hardship.
This bunch of elites and toffs are totally unaware of the economic realities facing society -
1. The VAT rise will cost families with children £450 this year alone
2. Tax credits and child benefit will be frozen from April
3. Petrol prices are soaring with the VAT rise adding 3p per litre
4. Economic growth has stalled
5. Unemployment is rising again – now at a 17 year high
6. Nearly 1 million young people are now out of work
But fear not, for the government have a strategy to help the less well off. Called the child poverty strategy, it aims to offer genuine opportunities to the most deprived people in Britain. Many disagree with the principles outlined in it pages and argue it is a bungling attempt to solve a critical problem.
Responding to the publication yesterday of the Government’s child poverty ‘strategy’ and social mobility strategy, the Chief Executive of Child Poverty Action Group, Alison Garnham, said:
“A child poverty ‘strategy’ which does not set out how poverty numbers will fall, and by when, is not a strategy and is incredibly disappointing and surprising given the Prime Minister’s stated commitment on tackling poverty.
“The ‘strategy’ is unlawful because it has not kept to the requirements laid down in law by Parliament. An expert Child Poverty Commission should have been set up and consulted in the strategy’s preparation. This failure shows in the poor quality of the ‘strategy’ itself.
“It is absolutely staggering to see in the 'strategy' cuts to housing benefit and support for sick and disabled families that will make poor families poorer. On top of benefit cuts, wage stagnation and rising prices for basics like food, fuel and clothes mean there is an immediate crisis for families. Urgently addressing the financial crisis for families should be the foundation for the strategy.
“Requirements on social inclusion and the progress Ministers expect to make on their targets by 2014 are missing. We are astonished to see a consultation on scrapping child poverty duties for local government promoted in the ‘strategy’, instead of being clearly ruled out.
“The ‘strategy’ starts from a false premise, suggesting that the last decade made no progress and did not address worklessness. In fact there’s been a downward trend for child poverty in workless households, but an upward trend for in-work poverty, which is now the larger problem.
“Although we finally have a document that tells us what the Government plans to do, it appears to do very little. Taken together with the social mobility strategy it is hard to see how they will have any traction on the major problem of child poverty we face. Britain could have the same low rates of child poverty as other European countries, but to achieve this we need a strategy that learns the lessons of what successful countries on child poverty have got right and addresses the structural unfairness in our own economy.”
On top of all this, on April 1st housing workers and their tenants faced the start of a two-year package of reforms to housing benefit that will have far-reaching effects on families and communities across the whole of the UK.
The new housing benefit caps for people in the private rented sector and the move to cut the number of properties people can choose from will have an immediate impact on families looking to find a new rented home.
There is also an important change to the levels of housing benefit that people in both the social and private sectors will receive if they have adult children at home.
From 1 April, tenants sharing their home with other adults need to collect more money from them to contribute towards the rent, or make up the difference from their own money. This will be an incentive to tenants to encourage their children to leave home and could also lead to greater risks of rent arrears.
Sarah Webb, Chief Executive of the Chartered Institute of Housing (CIH), said:
"People are going to have their options about where they can live cut significantly and it is likely that demand for the properties that remain available will be squeezed further.
"Government has argued that rents will fall as a result of the measures. There is no evidence at this time to suggest that landlords will respond to the changes by cutting their rents. Indeed, the latest surveys from across the sector suggest that rents are going up as demand outstrips supply and the number of new homes being built continues to be half of the level needed."
The average rent in England and Wales edged ahead by 0.2% to £684 a month in February 2011, to leave the typical cost of being a tenant 3.9% higher than in February last year, according to letting agency network LSL Property Services.
Ms Webb added: "Where tenants face significant shortfalls the choice is going to be stark, find money from somewhere else or move. Given these are people on low incomes their ability to save by cutting back on other items is severely limited.
"Ultimately, this will mean low-income families moving from the communities where they have jobs, where their children are in schools, where they having strong social networks."
The full measures which have now come into force are:
1. There will no longer be a five bedroom Local Housing Allowance rate. Weekly Local Housing rates will not exceed £250 for a one bedroom property; £290 for a two bedroom property; £340 for a three bedroom property; £400 for a four bedroom property.
2. The £15 excess will be removed as soon as the Local Authority reviews a claim. Claimants will no longer be able to pocket any excess money after their rent is paid.
3. Non-dependants living in households of Housing Benefit claimants will see their deduction increases take effect from April 2011.
4. Disabled people with a long-term health condition who need overnight care or live with someone with similar needs, may now be able to claim Housing Benefit for a private rented property which has an additional bedroom for a non-resident carer.
Bearing all this in mind, how can the government legitimately talk about increasing fairness, supporting those who are less privileged and increasing the chances for the poor? Once again it seems the Tories are full of lies and dishonesty just so they can hang onto power.
Showing posts with label tax. Show all posts
Showing posts with label tax. Show all posts
Tuesday, 5 April 2011
Thursday, 10 March 2011
It's cruel and it's unfair
Don’t get me wrong, I have nothing particularly against any individual Tory. I confess I don’t like the fact Citizen Dave, the people’s toff talks about addressing inequalities in this country, whilst stashing away over £30m in personal wealth, but that’s another issue.
No, let’s look today at this supposed desire to address inequalities and make Britain more efficient. According to the Public Accounts Committee, the government has "no clear plan" of action for tackling errors and fraud in the welfare system.
.
More than £2bn is being spent on benefit overpayments and no progress has been made in reducing it and it is also claimed officials had not got to grips with £1.3bn in under-payments, despite the hardship these cause. All this is despite the fact that the Tories have set a target of a 25% reduction in the cost of fraud and error by 2015. With these kinds of results, they have a long way to go.
Meanwhile, the popular media like to ‘carry on’ about social security scroungers but forget that tax evasion costs this country 15-times more than welfare fraud. Tax evasion is around 3% of total tax liabilities, while benefit fraud accounts for 0.8% of total benefit expenditure.
George Osborne made political capital out of saving £4bn on the benefits bill, and was happy for those making the claims he targeted to be called lifestyle choice fraudsters and layabouts – all, supposedly, because of the need to tackle the hole in the government's deficit. But he wouldn't have needed to make these cuts if he tackled the biggest category of fraud in the UK economy – that of tax evasion.
But of course we should not expect the Tories to attack business people, or the toffs when they try and save a little bit of tax. After all, for them it is all a bit of a game – can we dodge paying the taxman by not declaring all our income?
Meanwhile, John is a carer looking after his wife with chronic epilepsy. They live in social housing and would like to move, but they can’t get a transfer. John wants to work, but needs to be around his wife 24-hours a day. He doesn’t smoke, rarely drinks and his weekly treat is buying his family a small bag of donuts from the local supermarket – a treat they all look forward to as it is the only family event they can afford.
If John were to employ a professional carer 40 hours a week to look after his wife and charge the government, it would cost between £240 and £300 per week. Unfortunately, the rules don’t allow John to do this, so he had to claim Carer’s allowance – and how much the government gives him as a ‘thank you’ for doing the job? I meagre £53 per week – paltry by any stretch of the imagination.
But do the red tops cause an outcry about John’s allowance? Do they scream and shout when an unmarried mother’s benefit fails to turn up and she has to go to court because she stole a loaf of bread to feed her young child? No, she is another one of those state scroungers that want it all on a plate.
Let this blog send out a clear message to any Tory reader. Yes there are a small number of people who rip off the system – and they should be punished. But the vast majority of claimants are decent law-abiding people who just want a chance in life. Tory plans to bring about Universal Credits will not help them today (if at all) and the Work Programme is nothing more than a repeat of Labour’s mistakes. The DWP's own research has stated that "one quarter (27%) of claimants who leave unemployment to obtain a job return to claim unemployment benefits within 13 weeks, whilst two out of five (40%) return within six months". In addition: "just over half (53%) of workers return to JSA within 3 months of taking a permanent job either because they resigned or were sacked".
It is time the government opened their eyes and saw there are very clear injustices happening in this country and they are doing nothing to resolve it.
No, let’s look today at this supposed desire to address inequalities and make Britain more efficient. According to the Public Accounts Committee, the government has "no clear plan" of action for tackling errors and fraud in the welfare system.
.
More than £2bn is being spent on benefit overpayments and no progress has been made in reducing it and it is also claimed officials had not got to grips with £1.3bn in under-payments, despite the hardship these cause. All this is despite the fact that the Tories have set a target of a 25% reduction in the cost of fraud and error by 2015. With these kinds of results, they have a long way to go.
Meanwhile, the popular media like to ‘carry on’ about social security scroungers but forget that tax evasion costs this country 15-times more than welfare fraud. Tax evasion is around 3% of total tax liabilities, while benefit fraud accounts for 0.8% of total benefit expenditure.
George Osborne made political capital out of saving £4bn on the benefits bill, and was happy for those making the claims he targeted to be called lifestyle choice fraudsters and layabouts – all, supposedly, because of the need to tackle the hole in the government's deficit. But he wouldn't have needed to make these cuts if he tackled the biggest category of fraud in the UK economy – that of tax evasion.
But of course we should not expect the Tories to attack business people, or the toffs when they try and save a little bit of tax. After all, for them it is all a bit of a game – can we dodge paying the taxman by not declaring all our income?
Meanwhile, John is a carer looking after his wife with chronic epilepsy. They live in social housing and would like to move, but they can’t get a transfer. John wants to work, but needs to be around his wife 24-hours a day. He doesn’t smoke, rarely drinks and his weekly treat is buying his family a small bag of donuts from the local supermarket – a treat they all look forward to as it is the only family event they can afford.
If John were to employ a professional carer 40 hours a week to look after his wife and charge the government, it would cost between £240 and £300 per week. Unfortunately, the rules don’t allow John to do this, so he had to claim Carer’s allowance – and how much the government gives him as a ‘thank you’ for doing the job? I meagre £53 per week – paltry by any stretch of the imagination.
But do the red tops cause an outcry about John’s allowance? Do they scream and shout when an unmarried mother’s benefit fails to turn up and she has to go to court because she stole a loaf of bread to feed her young child? No, she is another one of those state scroungers that want it all on a plate.
Let this blog send out a clear message to any Tory reader. Yes there are a small number of people who rip off the system – and they should be punished. But the vast majority of claimants are decent law-abiding people who just want a chance in life. Tory plans to bring about Universal Credits will not help them today (if at all) and the Work Programme is nothing more than a repeat of Labour’s mistakes. The DWP's own research has stated that "one quarter (27%) of claimants who leave unemployment to obtain a job return to claim unemployment benefits within 13 weeks, whilst two out of five (40%) return within six months". In addition: "just over half (53%) of workers return to JSA within 3 months of taking a permanent job either because they resigned or were sacked".
It is time the government opened their eyes and saw there are very clear injustices happening in this country and they are doing nothing to resolve it.
Wednesday, 16 February 2011
Universally unfair credits: No justice for the poor
Well the day has finally come. Later today the government will set out how it intends to overhaul the welfare system to try to make work pay better and to tackle the "benefit culture". With it will come a new "universal credit", new sanctions for those turning down jobs and a cap on benefits paid to a single family.
According to Cameron, current rules "encourage people to act irresponsibly".
The reason behind all these changes? Is it because they want to make benefits fairer for all? No. Is it because they want to ensure those who are hurt hardest by the unfairness in society are protected? No.
According to ministers in the Department of Work and Pensions, five million people of working age are on out-of-work benefits, 1.4 million of those for nearly a decade, while unemployment has become entrenched in many communities. In the view of these Tories, many of whom are millionaires who have never been on benefit; this shows the current system is not working.
Ahead of the announcement, David Cameron said the "collective culture of responsibility" which had underpinned the benefits system for more than 50 years had eroded in recent years.
"The benefits system has created a benefit culture," he said. "It does not just allow people to act irresponsibly but often actively encourages them to do so."
As usual the Tories are determined to attack the small number (and even DWP are admitting the numbers are less than they have been saying) of people who abuse the benefit system. Nobody in the Tory party mentions anything about the number of companies or individuals who regularly abuse the tax system and, courtesy of clever accountants avoid paying millions in taxes.
Take for example Vodaphone, who have managed to save billions through effective use of tax havens. Oh it’s legal enough, but is it moral? Well there you have the $64,000 question.
Just as the Tories were coming into power a number of businesses saw the opportunity of a lifetime. In a study at that time, around one quarter of all self-employed people in the UK were considering moving themselves and their businesses abroad over the next five years. Is this how Cameron is going to promote business and help the unemployed find work?
It has been well documented that Philip Green has structured the ownership of the Arcadia group (which owns Topshop and Dorothy Perkins) so that neither he, nor his wife pay UK income tax on profits paid out by the group as dividends. Because Mrs Green lives in Monaco, she saves a packet. If dividends were instead paid to Mr Green as a UK tax resident, he would be subject to UK income tax at an effective rate of 36.1% (42.5% additional rate less 10% credit).
But you don’t hear the Tories whining on about these folk, and why? Because they and others like them bankroll the Tory party, Green is close buddies with Cameron – don’t forget he was asked by the prime minister to do an analysis of government spending and procurement. So we can’t expect these buddies to fall out too soon.
No, as usual it is the poor who will be beaten and bruised today. There will be no fairness, no equality and no justice for those needing welfare benefits.
Some things in life never change
According to Cameron, current rules "encourage people to act irresponsibly".
The reason behind all these changes? Is it because they want to make benefits fairer for all? No. Is it because they want to ensure those who are hurt hardest by the unfairness in society are protected? No.
According to ministers in the Department of Work and Pensions, five million people of working age are on out-of-work benefits, 1.4 million of those for nearly a decade, while unemployment has become entrenched in many communities. In the view of these Tories, many of whom are millionaires who have never been on benefit; this shows the current system is not working.
Ahead of the announcement, David Cameron said the "collective culture of responsibility" which had underpinned the benefits system for more than 50 years had eroded in recent years.
"The benefits system has created a benefit culture," he said. "It does not just allow people to act irresponsibly but often actively encourages them to do so."
As usual the Tories are determined to attack the small number (and even DWP are admitting the numbers are less than they have been saying) of people who abuse the benefit system. Nobody in the Tory party mentions anything about the number of companies or individuals who regularly abuse the tax system and, courtesy of clever accountants avoid paying millions in taxes.
Take for example Vodaphone, who have managed to save billions through effective use of tax havens. Oh it’s legal enough, but is it moral? Well there you have the $64,000 question.
Just as the Tories were coming into power a number of businesses saw the opportunity of a lifetime. In a study at that time, around one quarter of all self-employed people in the UK were considering moving themselves and their businesses abroad over the next five years. Is this how Cameron is going to promote business and help the unemployed find work?
It has been well documented that Philip Green has structured the ownership of the Arcadia group (which owns Topshop and Dorothy Perkins) so that neither he, nor his wife pay UK income tax on profits paid out by the group as dividends. Because Mrs Green lives in Monaco, she saves a packet. If dividends were instead paid to Mr Green as a UK tax resident, he would be subject to UK income tax at an effective rate of 36.1% (42.5% additional rate less 10% credit).
But you don’t hear the Tories whining on about these folk, and why? Because they and others like them bankroll the Tory party, Green is close buddies with Cameron – don’t forget he was asked by the prime minister to do an analysis of government spending and procurement. So we can’t expect these buddies to fall out too soon.
No, as usual it is the poor who will be beaten and bruised today. There will be no fairness, no equality and no justice for those needing welfare benefits.
Some things in life never change
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