Tax cuts for those on the minimum wage
19 June, 2015
The Government has vowed to let people ‘keep even more of the money they earn’ as they set out tax cuts for 30 million people.
The Prime Minister pledged to enshrine in law that workers on the minimum wage will pay no income tax, as he ruled out tax rises for the next five years.
The Queen’s Speech included a five-year tax lock which means income tax, VAT and National Insurance rates will not increase before 2020.
The Government’s promised ‘tax lock’ was a key Conservative pledge made in the closing stages of the general election campaign.
The legislation – setting a statutory ceiling at the current rates – will apply for the next five years of the current parliament and will cover the whole of the UK.
Chancellor George Osborne is expected to use a Budget in July to also promise to increase the 40p tax threshold to £50,000 to ease the tax burden on the middle classes.
The Government will also bring forward legislation to ensure that people working 30 hours a week on the national minimum wage do not pay income tax.
Mr Cameron said: “The first task of a One Nation Government is to help all working people have security.
“And nothing is more crucial to that than a job. We will reward work by letting people keep even more of the money they earn – for the first time putting it into law that the Minimum Wage is and always will be tax free.”
At Watson Buckle, we can provide comprehensive services to support employers with their minimum wage obligations, including providing payroll services.
For more information, please contact us.