TAX NEWS - 2010

UK Tax: Personal tax cuts

Personal tax cuts worth $8.65 a week to average wage earners will start flowing into pay packets this week.

The third and final round of tax relief since the 2007 election starts on Thursday - the start of the new financial year - with cuts applying up and down the income brackets.

More than 122,000 Victorians earning between $55,000 and $60,000 will pay $1350 a year less tax than they did three years ago.

That's when Labor matched then-treasurer Peter Costello's surprise three-year tax relief plan - and maintained it in government despite rising inflation and the global recession.

Workers on the average wage of about $59,000 will pay $450 a year less tax compared with last year, a saving of $8.65 a week.

Workers earning $35,000 will save $150 a year or $2.88 a week. Over the three years, that works out to a $1500 combined saving, according to Treasury calculations.

Someone on $100,000 will find annual savings of $500 on their tax bill or $9.62 - a combined saving of $2160 since Labor took office.

Deputy Prime Minister and Treasurer Wayne Swan said pensioners and working families deserved help as the global economic turmoil took its toll.

"Of course, Julia (Gillard) and I understand that a lot of Aussies are still doing it tough," Mr Swan said from Toronto, where he is attending the G20 summit.

"So the tax cuts coming through on July 1 this year will provide that bit of extra help that can make a real difference for families on a tight budget."

Mr Swan said workers earning $50,000 had had their tax bill cut by almost 20 per cent since the last election.