Tax credit changes announced

By Iain McCluskey

Tax credit changes that were to come into effect from 6 April 2016 will be cancelled.

This dramatic pirouette on the tax credit plans was a big surprise. Those people who rely heavily on tax credits will be hugely relieved but will need to have one eye on the impact on their pockets of Universal Credit when it is rolled out towards the end of the Parliament.

The Chancellor left his favourite rabbit, the personal allowance, in his hat. In addition, no movement in the National Insurance lower earnings limit leaves many of the poorest employees outside of the income tax system, but still liable for National Insurance - a long standing but very expensive problem to fix.