IFS reports falls in average income and inequality

Tax increases in the 2002 Budget saw average take-home incomes fall in real terms in 2003/04, but there was also a "big drop" in income from self-employment, according to the Institute for Fiscal Studies.

New and more generous tax credits helped "nudge inequality down" for a third successive year, the IFS said, but child poverty did not fall as sharply as expected.

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