IFS warns over tax and benefit changes

tax credit

tax creditWith the new tax year now underway, an influential think tank has warned that us families will lose out as a result of sweeping financial changes.

The Institute for Fiscal Studies (IFS) said families containing youngsters could lose as much as £511 annually as a result of newly introduced benefit and tax amendments - which come into play as of today.

And anti-poverty campaigners have also issued a warning, saying that the cuts which come into force this weekend could amount to £2 billion.

Among the changes are plans to make couples with children work for 24 rather than 16 hours if they want to become eligible for working tax credits.

Commenting on the think tank's figures, shadow chancellor Ed Balls said families could soon face a tax credit shock.

He stated: "Families on middle and low incomes are this weekend facing a tax credits bombshell from David Cameron and George Osborne.

"For all the Government's talk about increasing the personal allowance, these independent figures show that while they may be giving with one hand they are taking much more away with the other."

In response, the Treasury said other changes coming into force could make the average household £5.50 a week better off.