It is also important to remember that other announcements made in the summer budget will still be implemented. These include:
- loss of family element of tax credit worth £545 per year
- restriction of child tax credits to two children. Additional amounts for third and subsequent children will not be awarded for children born after 6th April 2017
All working age benefits will also remain frozen until 2020.
Rather than continuing to cut, the Poverty Alliance is calling on the UK Government to focus instead on closing the tax gap which is worth an estimated £122bn a year. It is estimated that tax evasion might cost the UK £85 billion a year, tax avoidance could cost £19 billion a year and unpaid tax could result in a loss of £18 billion a year.[1]
Peter Kelly, Director of the Poverty Alliance said:
“Today’s announcement on tax credits is welcome, but families still remain under financial pressure.
“Families will still lose the family element of tax credit, and working age benefits remain frozen until the end of this parliament.
“We are now at the stage where there is nothing to cut. We are hurting the most vulnerable in our society.
“Instead than taking money out of the pockets of the poorest, the UK Government should focus their energies on closing the £122bn tax gap.
“This £12bn of welfare cuts are a matter of choice, not necessity.
“There is a better way, and we believe that closing the tax gap is a part of this.
ENDS
For more information contact Carla McCormack, Policy and Parliamentary Officer, on 01413530440 or email carla.mccormack@povertyalliance.org
[1] Richard Murphy FCA (2014) ‘The Tax Gap: Tax evasion in 2014 and what can be done about it’ http://www.taxresearch.org.uk/Documents/PCSTaxGap2014Full.pdf
[1] Richard Murphy FCA (2014) ‘The Tax Gap: Tax evasion in 2014 and what can be done about it’ http://www.taxresearch.org.uk/Documents/PCSTaxGap2014Full.pdf
