Increase announced to £11,000 from April 2017

Mr Osborne confirmed the personal allowance will rise from its current level of £10,000 to £10,600 from April this year as planned, and will mean the typical taxpayer is £900 a year better off. He also announced the threshold at which people pay the higher rate of income tax will rise from £42,385 this year to £43,300 by 2017/18. The changes to the higher-rate tax threshold announced will cost the Exchequer £960 million in 2016/17, £1.48 billion in 2017/18, £1.585 billion in 2018/19 and £1.68 billion in 2019/20.

Mr Osborne said: ‘For the first time in seven years, the threshold at which people pay the higher tax rate will rise not just with inflation,but above inflation.’ The rise in personal allowance will mean tax cuts for 27 million people, making the basic-rate taxpayer £80 a year better off and saving £172 a year to those paying the higher tax rate, according to Treasurycalculations. Because the increase in the personal allowance is not offset by a reduction
in the 40p threshold, higher-rate taxpayers benefit in full from the announcement. It also means a boost to the tax-free amount people
can draw from their pensions.

Mr Osborne also announced that the transferable tax allowance for married couples is to rise by £50 to £1,100 from the current £1,050. The marriage allowance only applies to couples with one basic-rate taxpayer and the other earning less than the personal allowance. It enables one spouse or registered civil partner to transfer some of their tax-free personal allowance to the other.

 

Source:http://goldminemedia.co.uk/