BREXIT BONUS
Income tax thresholds to rise from April 2019 giving 32million taxpayers a bonus
Philip Hammond has brought forward a planned rise to the personal allowance
MILLIONS of basic-rate taxpayers will get a £130 boost in their pay packet as Chancellor Philip Hammond confirmed a rise to the personal allowance.
Higher-rate taxpayers won't pay any tax until they earn £50,000, a rise from £46,350, giving them an extra £860 per year, under the change confirmed in today’s Budget.
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From April 2019, the personal allowance for basic rate tax payers will rise to £12,500 from £11,850.
The move will be a welcome respite for workers and is expected to cost the Treasury £5billion.
The conservatives had previously pledged to increase the personal allowance to £12,500 by 2020 – 21 and the higher-rate allowance to £50,000.
But instead of waiting until Britain leaves the EU Mr Hammond confirmed today it will happen sooner than planned.
It had also been speculated that Mr Hammond would freeze the personal allowance in order to fund other measures announced today.
But the economic forecast from the Office for Budget Responsibility was better than expected, giving the Chancellor some extra money to play with.
more on budget 2018
At the moment the first £11,850 of money earned is tax-free and after this any amount is taxed at 20 per cent until your income hits £46,350.
All money earned after this point is taxed at 40 per cent until it hits £150,000 and after this it is taxed at 45 per cent.
Today’s change means that anyone can earn up to £12,500 before being taxed, while for higher-earners it’s £50,000.
When the last change to the personal allowance came in, we had an extra £1,075 in our pay packets, when compared to 2010. after it rose to £11,850, from £11,500.
The Chancellor also confirmed a rise to the National Living Wage today, which will rise to £8.21 from April 2019.
We have rounded-up all the winners and losers from today's Budget.
Did you know these eight facts about the Budget?
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