New tax, welfare and minimum wage changes set to make work pay

Changes to income tax and welfare rules, which come in to force this month will boost the amount of money in the pockets of those on lower incomes and make work pay.

The National Living Wage and Minimum Wage have already increased at above inflation, giving a full-time minimum wage earner a £690 annual pay rise.

On 6th April, the amount of money someone can earn before paying income tax will increase to £12,500. These changes will cut taxes for 2.4 million Scots and take 135,000 people on lower salaries out of paying income tax altogether.

Then, on 8th April, the annual work allowance for Universal Credit will rise by over £1,000, increasing the amount a claimant can earn before their Universal Credit starts to be withdrawn. This move ends the anomaly of the previous system which meant benefit claimants could be worse off if they found work.

Other measures introduced by the Chancellor this week include a cut to the maximum stake on Fixed Odds Betting Terminals, further measures to reduce tax evasion and a set of measures to reduce administrative burdens on charities.

Commenting, John Lamont MP said: “Weekly pay in the Scottish Borders is £50 lower than the Scottish average and £60 lower than the UK average, so there is still a need to bring high quality, better paid jobs to the Borders. However this package of measures will be significant for local people on lower incomes and will make a difference at a time when household budgets are tight.

“From April this year, workers on lower incomes will be able to keep even more of what they earn and those on the minimum wage will be getting an above inflation pay rise.

“And the changes to Universal Credit will also benefit hard working families. One of the huge positives of Universal Credit is that it makes work pay rather than discouraging people to find work. From next week, claimants will be able to earn £1,000 more before their Universal Credit starts to be gradually be reduced.

“The Chancellor understands that energy bills and the weekly food shop are costing more and putting pressure on many people. That is why the UK Government is backing people on lower incomes and making work pay.”