HMRC explained new tax allowances

Date: 3rd September 2008

HM Revenue & Customs (HMRC) has issued a reminder about how the 2008/09 basic personal income tax allowance will change this month.

Changes announced by the chancellor in May 2008 mean that most people under the age of 65 who pay tax at the basic rate should see extra £60 in their first pay packet on or after September 7th.

What's more, these people should receive £10 more per month until next April.

HMRC said that employers should have already made "all the necessary changes to their [employees'] tax codes".

However, it explained that self-employed people and sole traders would "have the new allowance taken into account in their tax calculation for 2008/09" when they completed their self assessment tax returns.

A statement from HMRC added: "Individuals where HMRC does not have full information on their tax affairs will get a weekly or monthly increase from September and will get the benefit of the backdated increase once they are taxed on a normal basis or when their tax liability for 2008/09 is finally calculated after April 2009."

In August, HMRC issued a statement reminding sole traders that the deadline for paper self assessment tax returns was fast approaching, meaning that people needed to "get organised now".