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Headline Numbers: Why is 30 hours a week important? Headline Numbers: Why is 30 hours a week important?
(about 9 hours later)
In the Queen's Speech it was confirmed the government would make sure that someone working 30 hours a week on the minimum wage would not have to pay income tax.In the Queen's Speech it was confirmed the government would make sure that someone working 30 hours a week on the minimum wage would not have to pay income tax.
But why 30 hours?But why 30 hours?
It's a figure that crops up quite a lot in the tax and benefits system, although it's well short of the 37.4 hours worked by the average full-time worker.It's a figure that crops up quite a lot in the tax and benefits system, although it's well short of the 37.4 hours worked by the average full-time worker.
The government's programme also includes giving 30 hours a week of free childcare (based on a 38-week school year) to families with three-year-olds and four-year-olds (who have not yet started school).The government's programme also includes giving 30 hours a week of free childcare (based on a 38-week school year) to families with three-year-olds and four-year-olds (who have not yet started school).
Thirty hours a week is the minimum that the Office for National Statistics considers to be a full-time job in its Annual Survey of Hours and Earnings.Thirty hours a week is the minimum that the Office for National Statistics considers to be a full-time job in its Annual Survey of Hours and Earnings.
It is also the minimum number of hours a week that someone aged between 25 and 59 would have to work to be eligible for Working Tax Credits.It is also the minimum number of hours a week that someone aged between 25 and 59 would have to work to be eligible for Working Tax Credits.
We know from the Labour Force Survey that 72% of workers in the UK work 31 or more hours a week.We know from the Labour Force Survey that 72% of workers in the UK work 31 or more hours a week.
Tax thresholdTax threshold
So it appears that this person working 30 hours a week is relatively unusual.So it appears that this person working 30 hours a week is relatively unusual.
The minimum wage at the moment for those over 21 is £6.70 an hour, which would be £10,452 a year for someone working 30 hours a week. Currently, the threshold for paying income tax is £10,600. The minimum wage from October for those over 21 will be £6.70 an hour, which would be £10,452 a year for someone working 30 hours a week. Currently, the threshold for paying income tax is £10,600.
The Conservative Party manifesto said the country was "on course for a minimum wage that will be over £8 by the end of the decade". Someone working 30 hours a week for £8 an hour would earn £12,480 a year, which is below the £12,500 a year income tax personal allowance that the government plans for 2020.The Conservative Party manifesto said the country was "on course for a minimum wage that will be over £8 by the end of the decade". Someone working 30 hours a week for £8 an hour would earn £12,480 a year, which is below the £12,500 a year income tax personal allowance that the government plans for 2020.
And we also know that if the minimum wage, which is based on advice from the Low Pay Commission, rises by more than a penny above £8 an hour, the income tax threshold will be raised accordingly.And we also know that if the minimum wage, which is based on advice from the Low Pay Commission, rises by more than a penny above £8 an hour, the income tax threshold will be raised accordingly.
You do hear references to the tax-free minimum wage without mentioning the 30 hours, but the Queen's Speech was very clear that the pledge was only for those working up to 30 hours.You do hear references to the tax-free minimum wage without mentioning the 30 hours, but the Queen's Speech was very clear that the pledge was only for those working up to 30 hours.
And remember, it's not really a tax-free minimum wage - you start paying National Insurance at £8,060 a year, which is only just over 23 hours a week on minimum wage.And remember, it's not really a tax-free minimum wage - you start paying National Insurance at £8,060 a year, which is only just over 23 hours a week on minimum wage.