In the first sole Conservative budget in 19 years, George Osborne has pledged to accelerate the increase in the personal allowance for 2016/17 from the previously announced figure of £10,800 to the new figure of £11,000.
The personal allowance 2016/17 is £11,000
The current personal allowance of £10,600 was due to increase to £10,800 in April 2016 but will now increase to £11,000 which was the proposed figure for 2017/18.
This all leads up to the plan for a personal allowance figure of £12,500 that the Conservatives plan to be in place by 2020. The government has continued to publicise it’s plan to increase the personal allowance so that those on lower wages do not have to pay any tax. However, of course, any increase in the personal allowance will also benefit those higher earners as they will have enough earnings to cover it. The only people who will not benefit in the increase in the personal allowance are those whose earnings are too high to be entitled to a personal allowance.
Each increase of £200 in the personal allowance should save people earning less than £100k pa, £40 a year in tax, or £3.33 a month, not a massive amount but every little helps if you are earning on the lower end of the scale.