Why a pay rise could prove costly
We’ll be taking a little look at why Chancellor of the Exchequer, Jeremy Hunt, is under pressure to alleviate tax burdens on households by introducing changes to the tax system. We’ll take a look at some thoughts from tax professionals and campaigners about how incomes are currently being impacted by tax policies.
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00:00 Ahead of his autumn statement, Jeremy Hunt is under pressure to alleviate tax burdens
00:06 on households by introducing changes. Earlier in the year, the Treasurer Select Committee
00:12 warned that many workers were intentionally keeping their earnings below thresholds that
00:16 would trigger large increases in tax or the loss of valuable benefits. Dan Needle, a tax
00:22 lawyer at Tax Policy Associates, said cliff edges in the tax system create a powerful
00:27 and rational incentive for people to turn away from work and for small businesses to
00:32 deliberately stunt their growth. He went on to say we should all worry about the impact
00:36 that this has on the economy as a whole. Sean McCann from the insurer NFU Mutual said high
00:42 rates in inflation we've had means that the £50,000 child benefit threshold is no longer
00:48 fit for purpose. A parent with an income of just over £50,000 or more will now pay 40%
00:54 tax and lose child benefit.