Wednesday, 20 March 2013

£50 gain from new tax allowance

Detail on the impact of the new £10,000 Personal Allowance - the level at which you have to start paying 20% income tax.

From the Treasury:

The increase in the personal allowance to £10,000 will take 257,000 
individuals out of income tax altogether in 2014-15. 

By April 2014, the cumulative effect of this Government’s increases in the 
personal allowance will lift 2.7 million people out of the income tax system. 
In 2014-15, the increase will provide 24.5 million individuals with a real 
terms gain (over and above that from normal indexation) averaging £50. 

Of these, 20.4 million will be basic rate taxpayers and 4.2 million higher 
rate taxpayers (figures may not sum due to rounding). 

0.47 million individuals will have an average loss of £50 in 2014-15. All of 
these have incomes above the breakeven level near £120,000 at which 
the personal allowance is tapered to zero and so no benefit is derived 
from the personal allowance increase.

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