Delivering the first Budget of the Conservative and Liberal Democrat coalition, Chancellor George Osborne outlined a series of measures intended to plug the hole in the nation’s finances.
However, the headline announcement that VAT will rise to 20 per cent – except on children’s clothes and food – is set to impact on lower-income families as much as the more affluent.
Meanwhile, child benefit will be frozen for the next three years and child tax credits will be withdrawn for families earning more than £40,000 a year.
Positive measures for families included the announcement that the tax-free personal allowance on income tax will be increased by £1,000 in April, giving 23 million people up to an extra £170 per year and taking 880,000 out of the tax system altogether.
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