There are a few other manifesto promises related to business and personal taxes that give us a picture of what progress has been made (see ‘related policies’ below). But the mention of “working families” means we also need to look at other tax initiatives that aren’t specifically mentioned in the manifesto, like tax credits.
For the business and personal taxes, progress has been made (or is about to be made in April 2019) across business rate relief, personal tax allowance and the higher tax rate. Furthermore, stamp duty has been cut for first time buyers, which applies to England and Northern Ireland, potentially Wales (after tax powers are devolved) but not Scotland.
More specifically for “working families, we need to look at things like working tax credit and child tax credit – both of which relate to people with children, and both of which are being rolled into Universal Credit. Then there’s the tax-free childcare scheme too. None of these rates have changed since the government came to power, but Universal Credit does complicate tax credits, because new claimants apply via Universal Credit, and existing claimants are staying on the ‘old’ system (though only until July 2019, when they’ll be moved over to Universal Credit too). The overall impact isn’t clear: a report from the Institute of Fiscal Studies estimated that 2.1 million families will lose an average of £1,600 a year, while 1.8 million will gain an average of £1,500. But one of the predicted losers were working single parents (expected to lose £1,000 per year). Along with the widely reported delays to payments when moving over to Universal Credit, this isn’t going to be a straight forward answer. We’re getting extra advice on this and will update this page when we have it.
For now though, given there has been movement on business taxes and further changes coming on business and personal taxes, this policy can be considered ‘in progress’. We’ll update this page as things develop in the world of business and personal taxes, and we’ll include comment from independent organisations too, especially around the impact of Universal Credit on tax credits. Follow this policy to get updates.
Get the detail
- Tax credits – Working Families
- Tax-Free Childcare – Working Families
- Universal Credit and tax credits – Gov.uk
- Universal Credit – Gov.uk
- What is universal credit? – The Week
- Universal Credit leaves working families worse off, IFS says – BBC
- Budget 2017: What does the stamp duty change mean? – BBC