2011 Budget – Changes To Tax & Benefit System
Changes to the tax and benefit system have been released by the UK Government which will be rolled out across the next three years. These changes will have a financial impact on millions of people across the UK. While some of these changes have taken place already, many are not likely to come into force until April 2011.
Theses changes include;
- Personal Allowance rising from £6,475 to £7,475, which means that the amount a person can earn before paying tax has increased.
- Higher Rate (40%) Income Tax threshold was £43,875 and is now £42,475. This is the amount a person can earn before paying the higher rate of tax. As a result of this decrease more people throughout the UK will be required to pay more tax.
Because of the above changes it will mean that;
- 500,000 people will stop paying income tax
- 750,000 people will become Higher Rate taxpayers
The changes to national insurance will see;
- Primary Threshold increasing from £110 per week to £139 per week
- Upper Earnings Limit decreasing from £844 per week to £817 per week
Families will also see a change to their tax credits which will include;
- Baby Element removed altogether
- Child Element increased from £2,300 to £2,555
- Family Element withdrawn at a rate of 41% for everyone earning over
Debt Support Trust is a registered debt advice charity (SC041902) providing debt advice on a range of debt solutions including;