End of tax year is ‘Bad Friday’ - Benefits and tax changes to hit families

Good Friday is the exact opposite this year – with families with young children standing to lose £511 a year on average under tax and benefit changes from tomorrow; a think tank has said.

The start of the financial year has been dubbed Bad Friday, with cuts of more than £2 billion taking effect over the Easter weekend.

Around 1m families will lose out, according to Labour. The government said the changes will create more winners than losers.

Shadow Chancellor Ed Balls said the IFS figures revealed a “bombshell”.

“Families on middle and low incomes are this weekend facing a tax credits bombshell from David Cameron and George Osborne,” he said.

“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.”

The Treasury retorted by claiming the average household would be £5.50 a week better off.

Child Poverty Action Group chief executive Alison Garnham, said: “This year’s holiday will feel more like Bad Friday for millions of families as they come to terms with over £2 billion of cuts.

“Some of the poorest working families will lose thousands of pounds from their annual income, leaving them in a desperate struggle to pay for basics like groceries, clothes and household bills.

“It is astonishing that the people making the smallest contribution to deficit reduction are in the richest half of the population. Ordinary families and children are now carrying the greatest burden of deficit reduction.

“The Chancellor’s own analysis shows he is failing the fairness test and that many of the wealthiest are let off lightly.

“Those working under 24 hours a week face the most brutal cuts of thousands of pounds if they cannot find extra hours - a real problem given rising under-employment.

“These huge losses in income will push some families back onto benefits - and are totally at odds with the message of making work pay.”

Ms Smith said: “The Government’s actions mean that from the beginning of the new tax year on Friday, 24 million households will be £6.50 a week better off.