A big surprise from the Chancellor in his announcement that Tax Credits are not to be reduced as originally planned.
The rate at which a claimant’s award is reduced as each pound of their income exceeds the income threshold (known as the taper rate) will remain at 41% of gross income from April 2016.
The income threshold will remain at £6,420 per year from April 2016. Claimants earning below this amount will retain their maximum award. Consequently the income threshold for child tax credit-only claimants will remain at £16,105 in 2016 to 2017.