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Income Tax: Tax Rates and Bands

Volume 475: debated on Tuesday 6 May 2008

To ask the Chancellor of the Exchequer what mechanisms he is considering for compensating people who are (a) carers and (b) retirees between the ages of 50 and 59 years who are paying more tax as a result of the abolition of the 10 per cent. starting rate. (202756)

The Chancellor wrote to the Chairman of the House of Commons Treasury Committee on 23 April to outline that the Government intends to do more to help low-income households.

The letter made clear that a report into the issue will be published in time for the pre-Budget report and that the Chancellor will report back to the House of Commons in the pre-Budget report.

To ask the Chancellor of the Exchequer what compensation is planned for retired people over the age of 65 years who are adversely affected by the abolition of the 10 pence income tax rate. (203394)

Budget 2007 announced increases in age-related income tax allowances for those aged 65 or over by £1,180 above indexation in April 2008, removing around 600,000 pensioners from paying tax. As a result of personal tax and benefit measures announced in Budget 2007, by April 2008 pensioner households will be, on average, £80 per year better off.

The Government have made clear that it intends to do more to help low-income households affected by the removal of the 10p starting rate of income tax, including pensioners aged 60-64. The Chancellor’s letter to John McFall of the Treasury Select Committee made clear that a report into the issue will be published in the run-up to the pre-Budget report, and that the Chancellor will report back to the House in the pre-Budget report.