Personal Allowance to be increased to £11,000 in April 2016
8th July 2015 | News
Chancellor, George Osborne has moved quicker than expected to increase the tax-free Personal Allowance from £10,600 in 2015-16 to £11,000 in April 2016.
Previous forecasts were that the allowance would be raised from the current £10,600 to just £10,800 but an additional £200 of tax free income has now been formally granted.
During his Summer Budget 2015, Mr Osborne reaffirmed his commitment to raising the tax-free Personal Allowance to £12,500 by the end of the Parliament, whilst also pledging to increase the allowance in line with inflation during the next five years.
The Chancellor labelled the move as “a down payment for a country on the up”.
“Our priority is not to raise taxes for working people but to cut them,” said Osborne.
“These were our priorities at the election and they are the priorities of this Budget. Rates of income tax in this Budget remain unchanged but the thresholds do not.”
Increases to the main rates of income tax have been ruled out by the Chancellor, but the higher rate tax threshold will rise from £42,385 in 2015-16 to £43,000 in 2016-17 and to £43,600 in 2017-18.
The move in itself could save £1,300 a year for workers earning between £50,000 and £100,000, according to reports.