The impact of tax and benefit reforms on household incomes

Document type
Briefing
Author(s)
Hood, Andrew; Waters, Tom
Publisher
Institute for Fiscal Studies
Date of publication
27 April 2017
Series
IFS Briefing Note; BN196
Subject(s)
Poverty Alleviation Welfare Benefits and Financial Inclusion
Collection
Social welfare
Material type
Reports

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Increases to the income tax personal allowance and higher-rate threshold, costing the government around £5 billion per year, have been the biggest change to taxes or benefits so far this parliament.

These have benefited most basic-rate taxpayers to the tune of £160 a year, while most higher-rate taxpayers have gained £380 a year. However, for the latter group, all this giveaway is doing is reversing most of the effect of the cuts in the higher-rate threshold in the last parliament. And cuts in pension tax relief, on top of a large number of tax increases in the last parliament, have hit those with the very highest incomes.

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