Tax reduction 'cut back by inflation'

The government's statement that the average British taxpayer is now charged £1,075 less in income tax than in 2010 is only partly true, an investigation by the Full Fact website has found. 

Following the latest increase in the personal allowance, the Conservative Party trumpeted the £1,075 figure, chiefly as a result of the rise. The average will also have been impacted by the cut in the top tax rate from 50p in the pound to 45p. However, Full Fact noted that once inflation is taken into account, the actual difference in real terms is around £850. 

The policy of raising the personal allowance was originally proposed by the Liberal Democrats in their 2010 manifesto, with a target of increasing it to £10,000. The Conservatives claimed during the campaign that this was unaffordable, but accepted the policy as part of the subsequent coalition deal and have continued to raise the allowance since the coalition ended in 2015.