Six thousand get Universal Credit tax help

Thousands of working Universal Credit claimants in South Tyneside will be able to keep more of the benefit as part of a major tax cut, figures suggest.

Chancellor Rishi Sunak said his Budget announcement that cutting the taper rate – the tax on a claimant's payment for every £1 that they earn above their work allowance - from 63% to 55%, was to "reward work" among low-income families.

Department for Work and Pensions data shows 36% of the 17,537 Universal Credit claimants in South Tyneside were in work as of August 12 – meaning the tax burden on 6,355 claimants will be eased when the move comes into effect before December 1.

Mr Sunak faced criticism that the taper rate cut does not compensate for the £20-a-week blanket reduction in Universal Credit in early October, or help people who are not in work.

In South Tyneside, roughly 11,200 Universal Credit claimants were not in work as of August 12.

Mr Sunak said: “This is a £2bn tax cut for the lowest paid workers in our country. It supports working families, helps with the cost of living and it rewards work.”

The changes mean that nearly two million families nationally will keep on average an extra £1,000 a year, he said.

Labour’s shadow chancellor Rachel Reeves said “never has a Chancellor asked the British people to pay so much for so little.

“After taking £6bn out of the pockets of some of the poorest people in this country, he is expecting them to cheer at being given £2bn to compensate.”