Adur, West & East Worthing Party including East Arun

£130.00 tax cut for 329, 200 people in West Sussex – Cllr Alan Rice

Today (6 April 2012) the Personal Allowance will be raised for the second year in a row, meaning 329, 200  people in West Sussex will get a £130 Income Tax cut and the number of the lowest paid people who have been lifted out of paying any Income Tax will reach 15,800.

Commenting, Worthing Lib Dem group leader Alan Rice said:

“The tax system had gotten increasingly unfair under successive governments over the last few decades, sucking more and more people into paying Income Tax.

“It was patently unfair that when Liberal Democrats came into office, millions of low-paid workers were paying a higher proportion of their income in tax than the richest were.

“I’m proud that Liberal Democrats did the right thing and made rebalancing the tax system a priority, putting it on the front page of our manifesto. More than a million people will have been lifted out of paying Income Tax all together and over 20m basic-rate taxpayers have received a £330 tax cut since the Coalition Government came into power.

“At the same time, Liberal Democrats are making sure the rich pay their fair share, by closing loopholes, introducing a tycoon tax and cracking down on tax avoidance. As we clean up the economic mess Labour left behind, it is right that the broadest shoulders bear the heaviest burdens.”



The Personal Allowance, also known as the Income Tax threshold, will rise to £8,105 on 6 April 2012, up from £6,475 under Labour.

In the early 1970s, the Personal Allowance was worth around 28% of average earnings. By 2010 that had dropped to around 20% as wages had outpaced the increase in the Allowance.

1. Tax changes

On Friday April 6, the Liberal Democrat-delivered increase in the Personal Allowance of £630 will benefit 25m ordinary working people. It will lift an extra 250,000 people out of income tax altogether.

Since joining the coalition Liberal Democrats have:

–     Removed more than 1 million low-paid from paying any income tax altogether

–     Given every ordinary worker an annual income tax cut of up to £330

–     Paid the largest ever cash rise in the basic state pension – £275 a year from this week for the full basic state pension (+£500 since we joined the coalition)

–     And thanks to Liberal Democrats most working age benefits are also increasing by 5.2 per cent to help those who’ve fallen on tough times.

And thanks to the budget delivered in March this year, by 2014, Liberal Democrats will have also ensured that those people working full time on the minimum wage will have seen their income tax bill halved.

2. Tax Credits

Labour oversaw a massive expansion in the cost of the tax credit system, developing a situation where 9 out of ten families were in receipt of means-tested benefits.

Labour started with a system that cost £18bn and left office spending £31.6bn. We will still be spending that amount this year and will be holding that constant. This effectively delivers a £3bn saving in real terms.

It is difficult, but it is fair to ask couples to work 24 hours a week to receive tax credits, given that a single person has to work 16 hours.

When you ask a single parent, for example, person to work two days a week before they get a tax credit, asking a couple to work three days a week between them is a reasonable.

Taking account of the up-rating measures to tax credits announced in the Autumn Statement, around 80 per cent of households with children will see their tax credits awards increase at least in line with projected average earnings growth this year.

When you look at the overall impact of the tax changes, the benefit changes and the spending reduction that we’ve had to make to deal with Labour’s economic mess the burden of that falls most heavily on the top 20% of the population.

And we have stopped the wealthiest in society receiving child tax credit to ensure the money goes to the people who need it. Under Labour people earning more than £60k, which would include all MPs, were receiving this benefit.

 3. Tax avoidance

There are millions of people who pay their taxes, who work hard, who aspire to do the right things for themselves and their families, and are quite rightly angered there is a wealthy elite of banks and large businesses who can pay an army of tax accountants to get out of paying their fair share of tax; picking and choosing the taxes they pay.

That’s why Liberal Democrats insisted that clamping down on tax avoidance, including working up long-standing Liberal Democrat ideas – for instance, to apply a new general anti-avoidance rule, was written into Coalition agreement.

Existing anti-avoidance measures will increase tax revenue over the next five years by £1 billion, and protect a further £10 billion that could have been lost. However we want to go further so we will introduce a new General Anti-Abuse Rule targeted at artificial and abusive tax avoidance schemes. Thanks to calls from Stephen Williams, the Coalition will bring forward legislation in Finance Bill 2013.