The personal allowances for 2017 have been announced and have been increased for all tranches of earnings from the allowance for zero tax to the 40% earnings threshold. This should mean a lower tax bill for most people although obviously it depends on whether earnings have increased in a similar manner.
The personal allowances for 2017 are as follows:
Personal allowance at zero rate tax – £11,200
Basic rate tax allowance – £32,400
Therefore the Higher rate tax threshold increases to – £43,600
The aim is to raise the higher rate tax threshold to £50,000 by the end of parliament and the personal allowance to £12,500 at the same point.
By 2017 we are referring to the tax year that runs from 6 April 2017 to 5 April 2018.
The basic rate of tax for 2017/18 is currently set at 20% (at time of publishing August 2015) and the higher rate tax is 40%. In addition there is an additional tax rate of 45% for earnings over £150,000.