AS Gordon Brown faces a Commons rebellion over the scrapping of the 10p income tax rate, Alton CAB has voiced concern over the impact on low- paid workers. Alton Citizens Advice Bureau (CAB) advisers are expecting an influx of people seeking Working Tax Credit support as the decision by Government to abolish the 10p rate bites into meagre wage packets. It is a move which has to be set at the feet of Gordon Brown who, in his last Budget as Chancellor in 2007, decided to cut out the 10p rate and to reduce the standard income tax rate to 20 from 22p. Set to come into effect on April 1 this year, in the March Budget current Chancellor Alistair Darling rejected demands to compensate those worst hit by the change, like the under-25s who earn less than £18,000 or those who work fewer that 16 hours a week and therefore do not qualify for tax credits. Brown himself believes no one will be worse off, citing generous tax credits, higher personal allowances and other changes that he feels will mitigate the axing of the 10p band, but rebellion is in the air and, with local elections on May 1, the hope is that the two could be cobbling together a package to soften the blow. But there is a principal at stake – Mr Brown's tax reforms look set to hit over five million low earners, with childless single people earning under £18,000 losing more than £230 a year. Not only will these changes take hold at a time when living costs are rising dramatically, but it could force a whole raft of society to become unnecessarily dependent upon the state. Alton CAB manager, Dominic Carney, refers to the changes as "bizarre and very damaging". He told The Herald: "The Government claims that they are doing this to simplify the tax system and that they cannot now go back on their proposal as they have already finalised their budgets for the year. "But how complex can an introductory 10p rate be? And why can they not use the windfalls being received daily through VAT on ever increasing fuel prices to both keep the 10p rate and reduce the main band to 20p?" While the March Budget also saw adjustments to the pensioner tax allowance, working and child tax credits and child benefits, that may compensate some of those affected, Mr Carney believes there are many groups who have earnings above the relevant earnings limit who will not be able to receive this compensation. "This is not coherent policy. The Tax Credit system is not integrated at all with the general taxation system in the UK. You have to make a specific claim to be assessed for tax credits and our figures show that less than one in four low paid workers without children who are entitled to Working Tax Credit do actually claim it. "This is a confusing and worrying issue for many people. There is a lot of media coverage but not much hard information about what people can do to ensure that they maximise their income. "We (at Alton CAB) can provide detailed information on tax and benefit related issues and would be happy to advise anyone who has concerns about this or other issues." To contact Alton CAB call 01420 84399 or to drop into the Cross and Pillory Lane office which is open 10am to 4pm Monday to Thursday. l To qualify for Working Tax Credit you have to be at least 25, working over 30 hours a week and on a low income, and you don't have to have children.
