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Thursday
Jul222010

No Tax to Pay for Lowest Earners

One million people are set to benefit from the new Budget as they no longer have to pay Income Tax.

We waited several weeks to hear what the results of the emergency Budget would be, and there were no huge surprises when the day itself dawned.  But I was interested to pick out a few choice nuggets of information on the day, and one of them concerned the announcement that the lowest earners in society would pay no tax.

The crux of the matter is that the threshold above which everyone pays Income Tax will be raised.  Currently it is set at £6,475, but this will go up by £1,000 to £7,475.  All low income earners currently earning anything between these amounts will thus find they no longer have to pay Income Tax.

In addition, I was pleased to see that the measures will also be granted to all taxpayers who earn enough to pay the basic rate tax.  The only group of people who will not benefit from this change are those who are currently paying the top rate of tax.

No doubt the higher earners will be displeased at this, but I am glad that the Chancellor of the Exchequer, George Osborne, is taking measures to try and ensure the lowest echelons of society are not battered as hard as those who are earning more money.

Reactions to the Budget have been mixed as always, but that is understandable.  I believe the Chancellor has taken the right steps to ensure the lowest earners – part timers and those on the minimum wage as well – are protected from the changes.  No Budget can ever please everyone, but I believe we all understand that bringing down the national debt is a necessity.

 

If you are concerned about the level of Income Tax you may be paying, consult us now at St Matthew.

 



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