Workers will pay no tax on the first £10,000 of their wages from next year – 12 months earlier than originally planned. Bringing forward the personal allowance rise will mean a cumulative benefit for typical basic-rate taxpayers of £705 since the coalition took power, according to Treasury figures.
From next month, the allowance will go up to £9,440 – a £200 boost for 24 million taxpayers, said George Osborne. It also means 2.7 million adults will be taken out of income tax altogether. Basic and higher rates of income tax stay the same and Mr Osborne has stuck by his decision to cut the top rate of tax on pay over £150,000 from 50p to 45p from April.Reuse content