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Citizens, please share in the discussion. This thread is for discussing the changes to the current system of tax credits. The current system of tax credits has been around for over 50 years and is considered to be one of the best in the world. As always, this document has been edited in order to make the changes more accessible to all.

The changes to the current system of tax credits are:

A single person earning below £25,000 could receive a tax credit of £500; a couple earning £250,000 could receive tax credits of £2,500 each; a couple (two couples if both in work) earning £100,000 or more could receive tax credits £7,000 each. The tax credits would be deducted from your income tax, rather than taken out of it. In the case of a single person, the income tax for the first 5 years would be £1,800. For those over 55 years who are self-employed, they would not receive tax credits, instead their personal tax would be deducted from their income tax. Personal tax would be deducted from income tax only for those in employment over 55 years old for the first 5 full years.

What will this mean to you?

Currently the system of tax credits provides incentives to help people on lower incomes, such as making sure less money is spent on food and other essentials.

Those on low incomes will also be able to receive tax credits at higher rates, such as when people have children.

Those who earn between £25,000 and £50,000 will pay no Income Tax, while those under £25,000 pay just the National Insurance contribution.

Those earning £50,000 and over are exempt from National Insurance contributions.

Those earning £100,000 or more will now be exempt from Income Tax on earnings above a certain threshold. This tax threshold is different on all income levels, and is determined by National Insurance calculations. For example, someone earning £200,000 with no National Insurance contributions would pay £0 Income Tax on £400,000 earned.

The basic rate income tax threshold is £12,000, and will rise to £15,000 for taxpayers with dependent children.

Those earning less than £25,000 will be affected by the increase in tax credits, as will those earning less than £50,000. Those under 40 year olds will be affected as well, as will those in work, in work for more than 6 months

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