A recent uSwitch poll has revealed that just 36% of consumers believe that the budget has helped families on middle incomes. This comes after the budget revealed tax cuts for high earners and will take 840,000 low-paid earners out of the taxation system by April 2013.
One of the most influential tax changes for middle-income families is the child benefit cuts. From 7 January 2013 a charge will be applied to taxpayers who claim child benefit and earn over £50,000 a year. Because of these changes in the system, an extra 500,000 people will be required to fill in an annual self-assessment tax form.
Approximately 840,000 will now lose all child benefit. The Government claims that 90% all families will remain eligible for child benefit and that analysis showed the changes will mostly affect high-earners aged 51-65 with children.
But, middle-income earners will also feel the affects of increased fuel duty, increasing food costs while potentially receiving no pay-rise this year.
James Sumpter financial planning director at BestInvest suggested to readers of the FT that one solution for those at the £50,000 threshold would be to make a calculated salary sacrifice in order to restore child benefit.
Published on 27/04/2012 © Listentotaxman.