Treasury Committee Budget inquiry - LITRG evidence

Published on 25 March 2011

The Treasury Committee of the House of Commons launched an inquiry into the Budget on Thursday 24 March, the day after the event. On Friday 25 March LITRG submitted written evidence to the inquiry and Robin Williamson, LITRG’s technical director, gave oral evidence on Monday 28 March. You can also watch the oral evidence session.

‘Our evidence welcomed the increase in personal allowances which will take a number of people on low incomes out of tax, although they are unlikely to gain much (if anything) overall because of the equivalent drop in their benefits entitlement, and the general cuts to welfare provision in the Spending Review.

Meanwhile, there will be yet more complexity with the basic personal allowance rising by more than inflation, while increases in age-related allowances will be linked with the retail prices index, and rises in the NIC limits and thresholds (after this year’s substantial rise in the primary earnings threshold) will follow the consumer prices index.

‘The proposal to bring the administration of income tax and NICs closer together is also welcome. Better alignment of the points at which income tax and national insurance contributions start to be paid would reduce complexity for low-income workers. However we are pleased to note that increases in the lower earnings limit, the point at which earners start to build up an entitlement to contributory benefits, will remain linked to the CPI. This will enable some 40,000 more earners to gain a contributions record.’

(25-03-2011)

Contact: Robin Williamson (please use form at http://www.litrg.org.uk/ContactUs)