Hidden cost of home loans

31st August 2001 at 01:00
TEACHERS who qualify for the Government's new interest-free loans towards the cost of buying a home could find themselves hit by tax bills of more than pound;300.

Around 2,000 cash-strapped teachers in south-east England are set to benefit from means-tested loans of up to pound;25,000. But union leaders say that unless the Treasury grants an exemption on the benefit, ministers will be guilty of "giving with one hand and taking away with the other".

Without tax exemption, teachers will have to pay pound;330 in extra tax each year. Education authorities will also have to pay out an extra pound;180 annually in National Insurance contributions.

Doug McAvoy, general secretary of the National Union of Teachers, said:

"Extraordinary cynicism would greet a Government announcement that so blatantly gives with one hand and takes away with the other."

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