tax credits

[hatstand]

have out this inteh news section coz it's about the politics behind them. It's a genuine qeustion. Can someone explain to me wtf is the point of having a seperate complex appalingly administrated system rather than simply lowering tax bands or upping the tax free allowance. Am i missing something?

[QueenOfQuotes]

don't know - but I'm impressed you got the right topic better than I did yesterday. I did a feeling depressed/relationship thread yesterday - and put it in Chat ??

[hatstand]

I assume it is. However we don't target child allowance in teh same way. I wouldn;t be at all suprised if the money saved by doing it through a straighforward change in existing tax system would cover the extra cost of extending it to all low earners and not just families.

[tallulah]

By upping the tax free allowance or adjusting the bands you will give the same benefit to low income families and millionaires. Tax Credits are targeted at the lower paid. You could do it through a separate tax allowance as was done before but under Independent Taxation there is a high risk of multiple claims, especially for couples who aren't married and don't have the same name. It's also easier to pick up and prosecute fraud under the current system.

I found one of my DHs pay slips from 1983 and the tax free allowances covered almost 75% of his pay. They haven't kept in line with inflation since then, so the lower paid are paying proportionately more tax. It needs changing but can you see this Govt doing it?

[katymac]

There is a system called negative income tax 9which used to be supported by the Libs) which counted the people (& ages) in your household and based your tax allownace on your needs

If you were on a low income, it would be topped up.

Tax credits is a bastardised form of this

[munz]

tax bandwiths and 'freepay' allowances normally change every year, think there's only been one year I can think of when they haven't althou freepay doesn't normally go up by much. (about 900 I think)

[hatstand]

I think they should learn how to administrate the actial system before they worry about fraud