MARY is a 28-year-old single mother and works as an administrative officer in the Civil Service, earning £19,998.
Her net income after income tax and other deductions has risen by £151 a year to £16,659, due mainly to increases in the single parent allowance by £150 to £2,650 which compensated for lower mortgage interest relief. Mary has also benefited from the increase of child benefit by £2 to £29 per month. However, she was disappointed that there was nothing in the Budget about tax relief for the cost of private childcare for her daughter.
Mary has an 11.5 per cent fixed rate mortgage of £32,500 on a flat in a tax designated area, which she bought three years ago during a period of high interest rates. She can write off 50 per cent of the capital cost of the apartment over 10 years against her taxes, which works out at £1,615 a year, or £775 after tax. Mary will also suffer from the increase in cigarettes, but is pleased the Minister did not put up duty on alcoholic drinks as she occasionally likes a few tins of cider. Increases under the Programme for Competitiveness and Work and the civil service increment will be worth about SOP in the pound in take home pay.