27 November 2015
Autumn Statement 25 November 2015
In his Autumn Statement on 25 November, 2015, the Chancellor announced that the main cuts to tax credits which were to take effect from April 2016, will not now go ahead. Those cuts would have involved reducing the income thresholds and increasing the taper rate and this decision means the tax credit income thresholds and taper rate will remain unchanged at their current levels from April 2016.
This is good news for tax credit claimants but there are other changes which are still planned to take effect from April 2016. These are:
- From April 2016, tax credit claimants who are repaying overpayments and have household income of £20,000 or more will have their recovery rate increased from 25% to 50% of their award.
- The income disregard for rises in income will decrease from £5,000 to £2,500.
- All elements of tax credits (except the disability elements) will be frozen from April 2016.
Additionally, the changes planned for April 2017 are still expected to go ahead. These changes include, from April 2017:
- anyone who has a third child on or after 6 April 2017 will not receive the child element of child tax credit for that child.
- the family element will be removed. Only those who have a child on the claim born before 6 April 2017 will continue to qualify for the family element.
You can read more about the Autumn Statement 2015 in our article on the LITRG website
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