How changes to tax credits will affect employees from April 2016

Plans to reduce the overall welfare bill have resulted in radical reforms to working tax credits which will have a wide impact on employees. Victoria Todd, technical tax expert at The Low Incomes Tax Reform Group (LITRG) has produced guidance and a quick reference table to help claimants and any advisers to see how the changes to working tax credits (WTC) in 2016 will affect individual taxpayers

Last month, the House of Commons approved plans to cut tax credits as part of the planned cuts to the welfare budget, a move which has been received with disquiet, and a lack of awareness of the full impact of the changes.

Most tax credit claimants will have their working tax credit and child tax credit reduced from April 2016 after the government announced changes to the working tax credit (WTC) threshold and taper rate in the Summer Budget and recently.

Unless you are a tax credits expert, these changes may have passed you by. LITRG has produced a quick reference table to help claimants see their potential losses from April 2016.

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