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28-04-2008
National charity Citizens Advice has written to the Chancellor, Alistair Darling urging the government to fully compensate everyone who is worse off financially from the removal of the 10p starting rate of income tax. The charity has called for any compensation to be introduced quickly and effectively, taking into account any potential barriers such as difficult claiming procedures.
Citizens Advice stresses that any compensation package must include:
- Bringing those under 25 without children into entitlement to working tax credit (WTC)
- Allowing carers to qualify for WTC at 16 hours, recognising that their ability to work full time is limited
- Addressing the low level of benefit take up in the groups who have lost out as a result of this change - less than 1 in 4 households without children entitled to WTC actually claim it. Help with rent through HB also has a low take up rate by working families.
- Making wider changes to WTC or increasing the personal tax allowance to ensure all those who have lost out are compensated.
Citizens Advice Social Policy Officer, Katie Lane said:
“Every year Citizens Advice bureaux provide advice on nearly 3.5 million problems relating to welfare benefit, tax credit, and debt. The effect of the removal of the 10p starting rate of income tax is therefore of great concern to us.
“While we welcome the government’s recent commitment to compensate those who have lost out, it is vital that any measures can be introduced quickly, are backdated and are easy for people to receive. Any barriers, such as complex claiming procedures could cancel out any positive impact.
“Whatever package of remedies is ultimately implemented it is absolutely essential that they are accompanied by significant measures to dramatically increase take-up of means tested benefits and tax credits by families in low paid work, and to improve the standards of service provided by the HMRC and DWP.”
Notes to editors on Citizens Advice
- The Citizens Advice service is a network of independent charities that helps people resolve their money, legal and other problems by providing information and advice and by influencing policymakers. For more information in England and Wales www.citizensadvice.org.uk
- The advice provided by the Citizens Advice service is free, independent, confidential, and impartial, and available to everyone regardless of race, gender, disability, sexual orientation, religion, age or nationality.
- Most Citizens Advice service staff are trained volunteers, working at over 3,300 locations across England and Wales.
- Advice and information
 www.adviceguide.org.uk
- Volunteer hotline 08451 264264 (local rate)
- Citizens Advice Guide to your rights, second edition: January 2008 - over 600 pages of practical, independent CAB advice. An invaluable resource for any bookshelf - available from all good bookshops; price £11.99; ISBN: 9780141034089
- Follow Citizens Advice on Twitter: twitter.com/CitizensAdvice
- Subscribe to Citizens Advice press releases via RSS news feed: www.citizensadvice.org.uk/pressoffice
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