Personal tax allowance rises to £11,850
TAX payers are to benefit from more money in the pockets after a new increase in both personal tax allowance and the higher rate band.
In his speech Chancellor Philip Hammond, as expected, increased the amount someone can earn before they must pay tax from £11,500 to £11,850, effective from April, leaving the typical basic rate tax payer £1,075 a year better off compared to 2010. In the same address he confirmed that the level at which high-earners enter the 40 per cent tax band will rise from £45,000 to £46,350.
Tax partner at PwC in Belfast, Janette Jones said the news was welcome, but questioned whether it was the best way to help those at the lower end of the scale.
"The tax free personal allowance has increased by over 40 per cent against inflation since 2010, removing the need for a considerable number of lower paid people to pay income tax. However, given the point at which national insurance is payable by employees starts at more than £3,000 below that of income tax, the lowest paid taxpayers may reflect on whether a further raise in the personal allowance is the right way to support them."
Head of private client services at EY, Sheerna Deveney said the changes in taxation levels were not significant.
"The Budget was largely uneventful for the individual taxpayer. Wins in relation to the personal allowance and the basic rate tax extension weren't unexpected."