Budget blow for pensioners

SNP Work and Pensions spokesperson Eilidh Whiteford MP has warned that the Chancellors decision to freeze personal tax allowances for the over-65s will hit pensioners hard. Dr Whiteford contrasted the Coalition Government’s treatment of pensioners with tax cut given to the highest earners.

The higher personal tax allowances granted to those over the age of 65 to 74 (£10,500), and for those aged 75 plus (£10,660) will be frozen until they come into line with the basic personal tax allowance.

Dr Whiteford said: “The Budget truly fails the fairness test when millions of pensioners are penalised while millionaires get a tax cut from the Tories.

“While, as expected, the Chancellor increased personal tax allowances, his decision to freeze the higher age allowances granted to those aged over 65 will hit pensioners hard.

“The devil is always in the detail with Treasury announcements, and the Chancellor must now say whether any assessment was made of the impact that this decision on pensioner households.”

The HMRC had claimed last week that the plans to end age-related tax allowances for pensioners would see them being an average of £83 worse off.

The ‘granny tax’, as it was coined, was just part of the new measures announced in last Wednesday’s Budget speech.

Other measures include the increase in personal tax allowance, resulting in people being allowed to earn £9,205 before they are taxed in April 2013.

Tax avoidance will be clamped down on, the 50p top rate of tax will be reduced to 45p, and the corporation tax will be reduced to 24%, down to 22% by 2014.

Elsewhere, the 3.02p per litre increase on fuel will go ahead on August 1, the duty on all tobacco products has risen by 5%, and there was a shift in the taxation of gambling, with gaming machines having a standard rate of 20%.

Low-prize machines will be taxed on 5% of net takings.