Brown has made much of the increase of £150 in child tax credit and £1200
in the maximum income before the working tax credit starts to
get withdrawn. But have a look on Annex A Page 8 of 32 bottom of page paragraph A14 (page 212 of whole document)
"A.14 From 6th April 2008, the rate at which tax credits are withdrawn will increase from 37 per cent to 39 per cent."
In otherwords, if you are on tax credits the cut in income tax from 22 to 20% is
cancelled by the increase in tax credit withdrawal from 37 to 39%, plus you get
the increase from 10-20% with the starting rate abolition.
The increase in child tax credit by £150 if you have children helps and the rasing
of start of withdrawal from £5220 to £6420 also offsets the rises to the extent
that the very low paid are a little better off, but this is no giveaway
for the low paid. They are still taxed at 70% for every extra pound they earn
(20% income tax, 11% national insurance, 39% tax credit withdrawal).
A real incentive to work, eh?