As politicians in Westminster, and the country at large, prepare for George Osborne’s Budget tomorrow (Wednesday 19th March), Chelsea and Fulham MP, Greg Hands, has said now is also a good time to look back at how the Budgets of the last four years, under the Conservative-led Coalition, have given a real tax cut to millions of working people through the raising of the personal allowance.
Since coming into office, the Chancellor has increased the income tax personal allowance by over 50%, to £10,000 in April 2014. The personal allowance is the amount of earnings someone can receive before having to pay any income tax. The increase in the personal allowance means a basic rate taxpayer will now pay £705 less tax than in 2010, and a family with two basic rate taxpayers will pay up to £1,410 less income tax than in 2010-11. Across the country, 25 million people have received this income tax cut. Significantly, it also means 2.7 million people have been taken out of income tax altogether, including 255,000 people living in London, helping hardworking people to be more financially secure.
Greg Hands MP said: “I’m proud that a Conservative led government with a Conservative Chancellor is rewarding work by cutting tax. By April 2014 we will have increased the personal allowance to £10,000, meaning a typical tax cut of £705 to basic rate taxpayers. And 2.7 million people on the lowest incomes will now pay no income tax at all.”
Raising the personal allowance has benefited not just lower earners but also higher rate payers earning up to £100,000, who now pay less tax on the first £31,866 they earn. This means a real tax cut for a huge majority of Chelsea and Fulham residents, where the average salaried income is £37,440.
Greg added: “By aiming our tax cuts at the bottom end of the scale, we have brought an earnings boost to working people which follows them right up the income ladder. Coupled with our reform of the benefits system there is now an even bigger incentive for people to get into work, even if it is lower paid or part time. And it is more people working, some for the first time, which is really driving our economic recovery."