Treasury Committee to examine whether tax and benefit ‘cliff edges’ are disincentivising return to work
The Treasury Committee examines the impact of tax and benefit ‘cliff edges’, hearing from economists and experts.
Meeting details
A cliff edge occurs where a small increase in income leads to a large loss of benefits or an increase in tax. For example, where increased earnings causes a parent to lose child benefit, tax-free childcare or free school meals.
Earning just £1 too much can cause a recipient to become ineligible for the Government’s cost of living support payments, something the Committee has previously criticised.
MPs on the cross-party Committee are likely to use the session to explore how the impact of such cliff edges can be softened when it comes to free school meals, universal credit and child benefit.
The Committee, joined by the Chair and other members of the Work and Pensions Committee, is likely to discuss the impact of cliff edges on work incentives, how they can affect middle income families with children, and those repaying student loans.
The MPs may also examine small businesses and the VAT threshold, and the current stamp duty thresholds.