Over 50s could be exempt from income tax for up to a year under plans to tempt people back to work
12 January 2023, 11:05
Ministers are looking at plans to give tax breaks to people to come back to work after Covid-19.
As part of a major overhaul to boost employment, people would be offered the tax break to start work again.
Treasury officials are being urged by senior ministers to consider exempting people over the age of 50 from income tax entirely for up to a year to encourage them to start working again.
The plans come amid conners millions of people have opted out of the labour market since Covid.
A source told The Times: “The biggest challenge we’re facing is how to get people back into the workforce.
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“There’s a discussion in the Treasury about how to use the tax system, whether people could be given a bigger tax allowance during the first few years they are back in work.”
Last week Rishi Sunak said: “We need to look at how our welfare system is operating”, to ensure it is “incentivising people who can be, to be in work”.
Reform of disability benefits is also being looked at.
The existing “perverse” system, which ministers think encourages people to prove they are too ill to work, could be scrapped in an effort to reverse a rise in the number of people not looking for jobs.
Ministers believe the present system encourages claimants to appear as ill as possible rather than focus on what they are capable of doing.
