OLD SYSTEM:
£8,000 - £5,035 allowance = £2,965
£2,965 - £2,150 (10% tax band) = £815
£815/100 x 22 = £179.30 tax to pay, plus £215 from the 10% band above, = £394.30 tax.
NEW SYSTEM:
£8,000 - £5,035 allowance = £2,965
10% tax band abolished.
£2,965/100 x 20 = £593.00 tax.
O.O
How does this simplification help the poor? Tax Credits are a joke. The basic tax threshold will need to be raised considerably higher if the new budget is wanting to help out those most in need of tax reductions.
