Compensation For Abolition Of The 10 Pence Tax Rate

EDM number 1477 in 2007-08, proposed by David Taylor on 06/05/2008.
Categorised under the topics of Incomes and poverty and Taxation.

That this House warmly welcomes the Government's recently announced commitment to compensate those individuals who have lost out since 6th April 2008 because of the abolition of the 10 pence tax rate; is very concerned that the details of the plan so far available in relation to the mechanism for reimbursement suggest a risk that it could be incomplete, delayed and inaccurate; fears that the use of a mix of winter fuel allowance, tax credits, minimum wage and other changes to reimburse all those who are adversely affected is unnecessarily confusing and prone to significant error and take-up problems; understands that there is a preferable method using the income tax system itself in a way not dissimilar to how pensioners get extra tax allowances; notes that a decision, for all adults under 65 years, to add an extra amount, capped at £1,200, of 50 per cent. of income over £5,200 to the 2008-09 personal allowance, and for this extra to be progressively withdrawn at the rate of £10 for every £100 of income over £7,600, should fully compensate those with incomes from £5,200 up to £19,600 adversely affected by the 10 pence rate abolition; believes this method has the benefits of speed, relative simplicity, being retrospective and fully and accurately reimbursing all those, and only those, who otherwise might lose up to £240 per year; commends this cost-effective scheme to the Government for consideration; and urges it to announce its conclusions on this issue well before the Pre-Budget Report 2008

This motion has been signed by a total of 35 MPs.