All former 10p and 22p band taxpayers are to benefit from a lump sum in this month's paycheque.
Millions of Britons are to receive a tax rebate, under new legislative reforms set to come into effect next week.
Basic rate taxpayers, of which there are around 22 million in the UK, will have their personal tax-free allowances boosted by £600 to £6,035 on September 7th, and will receive a lump-sum payment of £60 in their next salary cheque. Moreover, net pay will also typically rise by a further £10 a month for the last six months of the tax year, meaning that they will benefit from an overall annual saving of £120.
The move comes following chancellor of the exchequer Alistair Darling's decision to modify the government's plans of scrapping the 10p tax band earlier this year. Originally, the old 22p and 10p bands were to be merged in to a single, 20p band; however, following complaints that this would leave many poorer Britons even worse-off than before, the government decided to boost personal allowances in order to sweeten the deal for low earners.
Some groups have been critical of Mr Darling's move, pointing out that any economic benefits must be set against the fact that the rebate will cost the public purse £2.7 billion at a time of slowing economic growth.
Speaking to the BBC, Chris Jones at tax advisers Lexis Nexis commented: "When the chancellor put this budget together he wasn't expecting to lose £2.7bn, but I'm sure when he re-jigged his numbers, he will take account of this extra money. However, what we need to bear in mind, it could be good news for the economy."
Comments (19)
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Ive just been made redundant i get my final pay on the 12th of this month does that mean ive lost out on my rebate? after scrimping by on partime wages!
Thank goodness the PM has seen sense! I only work part time (due to my age) and to lose the amount I did has been hard. This rebate and lower tax for the rest of the year will certainly help but what about the forever rising food prices? I now spend £20 a week extra on our food bill!! I dread retiring!! I think I will have to keep working until I drop!!
Mr Naylor
2nd Sep 2008 18:35
I ask you should we be greatful for this refund?, of course the answer in no!, this money should never have been taken out of our pockets, as a married man with no children I am hammered everytime there is a budget, at every opportunity the government uses every excuse to raise or invent taxes for example teenagers binge drinking ( if its such a problem raise the age limit to 25) the ordinary drinker should not be punished for the actions of a few morons.
But of course the government don't think in this way and that is why the country is going down the pan, from immigration to economy I am disgusted at most of the decisions that are made.
Viva la recession.
I would like to thank Mr Brown for this £120 refund, it will go towards the increases in council tax/ water/ gas/ electric/ petrol/ car tax/ bus fares/ clothing/ food/ drink e.t.c, I'm sure everyone will agree that we are all so lucky to have such an understanding prime minister, is he really on this planet?
Richard
2nd Sep 2008 19:02
I can't wait for the rebate, now I can pay back some of the money I have borrowed to feed my family, thanks labour hope you enjoyed your holiday's
And what about retired people? Many of us also pay tax on our savings and other income, but can we get a refund? Even though it is a pathetic amount, the State Pension takes up much of our Tax-free Allowance and then we get taxed like everyone else. I know our Personal Allowance has been increased, but over that we are still paying the same rate of tax as salaried people and cannot now get a tax refund on our Share Dividends either. The Government seems to ignore anyone between 65 and 70, yet in a few years' time this age group will most likely be expected to continue working until they are 70. Some of us have to anyway, because it's impossible to live on £120 or so per week, which is the maximum amount the Government says a single person needs in order to survive!
Eileen Thomas
8th Sep 2008 11:33
I have been advised by H.M.Revenue that I will not receive the £60 payment as promised, because I have been placed on an M1 tax code when I received my State Pension.They state that they will "revue" the situation at the end of the tax year.Therefore whilst I am eligible for the rebate I have to wait until next year for them to decide to give it to me.Is this correct or is it a Government ploy to defer payment?
P Davies
11th Sep 2008 11:37
I have a very small pension plus a State pension and I understand will be worse off even after the rebate of £120 due to the loss of the 10p tax band (thanks to that devious conjuror Gordon Brown, who still meddles in Exchequer matters even though he is now PM).
It also annoys me that my state pension for which I paid over the years is classed as a "benefit" not a "right". If it is a "benefit" why is it subject to tax, as other benefits are not? My retirement savings are not going to last long if they have to be used to pay for essentials such as fuel, etc.
hayley
11th Sep 2008 14:09
how can we find out if we are entitled to a tax rebate?
why not just give us the £ 120 on a one off payment?The £ 10 a month we will hardly notice it.
Richard
19th Sep 2008 17:14
I don't understand why the working man can't have the full refund in one go, as usual I have noticed that the pensioner is complaining, we already subsidise the old folk enough from free bus passes to winter fuel allowence e.tc they get a big chunk of our hard earned cash, maybe if they had one day a week away from bingo or the pub we wouldn't have to subsidise them so much.
And don't tell me they can't afford to go to the pub everytime I have a day off of work the pub is packed like an old folks home.
Melissa
25th Sep 2008 10:43
Well, I can't say i'm overjoyed at this but it's better than a kick in the teeth... yes the cost of living has gone up dramatic, we are probably spending about 30% more on the cost of living but there is absolutely nothing that we can do about it unfortunately, we are just here to pay their wages so they don't care, sometimes wonder if I would be more better off on the dole.... wouldn't have to pay C tax, rent and the list goes on, if you work you just get every last penny taken from you, I have 2 jobs and still can't afford the rent, I seriously suggest they get their priorities straight...!!
Diane Johnson
30th Sep 2008 15:30
Who does Richard (19th September) think he is. Pensioners, like myself and my husband, have paid their taxes and their own way the whole of their working lives and we cannot afford to go to the pub, as he suggests. Pensioners like us have paid for their state pension, it is not a benefit!!!
We have paid our dues; our hard earned cash being used to subsidise skivers, some of whom have never worked, as well as the elderly. I take it you wont be accepting such payments when your time comes!!
Why are we grateful for a one-off payment of £60 when our tax bill has increased. This applies to the current year alone and we will continue to pay the increased tax rate on our incomes, for which we have worked, and will be worse off in the long run. We too have our bills to pay.
Has anybody found that the rebate has been taxed?
Richard
2nd Oct 2008 18:06
In reply to your question Diane Johnson,
I am the guy who pays tax on every wage I go out and earn and I have never claimed a single benefit, my generation did not get the country into debt and my generation is intelligent enough to pay into a private pension, if you don't think you can survive on the money we allow you get a job and stop being a burden to me.
Anne Marais
3rd Oct 2008 19:25
I work for an agency as a temp and I didn't get anything. When I phoned the agency they said they had never heard of the tax refund. Will I still qualify? I suppose I have to claim it myself. Please help.
My boss pays my tax, so does that mean that I myself do not get a tax refund ?
j.w.moon
9th Oct 2008 09:45
How will pensioners paying tax receive this rebate?
Linda Hamer
14th Oct 2008 15:11
I still haven't received my rebate, is there a time limit that your boss has to pay this by?
