Credit Action has released its Tax & Benefits Report 2012 which highlights 38 changes that will come into effect during the month of April. Of these, only 13 were deemed positive or beneficial, 21 were found to have an overall negative effect and four had mixed outcomes.
Although individual circumstances will determine what effect the Budget has on each person, one of the biggest changes is the increase of Personal Allowance from £7475 to £8105 which will have a fairly widespread positive effect.
However, in certain circumstances this will be offset by some of the 21 negative changes, Credit Action has identified.
* The Couples Element as well as the Lone Parents Element of Working Tax Credit is being frozen this year, meaning that they will not increase in line with inflation in the coming tax year. In addition, the 50+ Element of Working Tax Credit will be removed entirely.
* The Family Element of Child Tax Credit, is no longer being protected meaning the overall amount of Child Tax Credit a family receives could drop by up to £545 per year, particularly if your income is close to £40,000.
* Some couples with children will have to work longer for Working Tax Credits – they will have to work 24 hours a week in total, with one partner working at least 16 hours a week.
Michelle Highman said: "Our report highlights 38 key changes which take effect in April this year. For some, these will have a significant impact. If you are in a group that is likely to be hit by the changes, it's important to find out what it means for you, and to plan and budget accordingly."
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