Creditworthy: Assessing the impact of tax credits in the last decade and considering what this means for Universal Credit

Creditworthy assesses the direct and indirect impacts of tax credits, finding that there is no evidence that tax credits hold down low wages. The analysis discredits the assumption that tax credits, available to low and middle income families, enable employers to pay lower wages.

Tax credits reach around six million families, providing substantial support for households on a low to middle income. Many assume they reduce wages by increasing the number of people willing to work for low pay and discouraging recipients from moving into higher paid roles.