Personal tax changes – allowance and band increases

Following the mid-term budget that took place at the end of October, a number of changes have taken place affecting the national income tax. These changes will affect a number of people including Income Tax Payers, employers and pension providers.

At Harvey Telford and Bates, we’re on hand to offer the best advice and solutions to our customers to make the transition through these changes as smooth as possible.

At the budget, the Chancellor announced that increases to the personal allowance and basic rate for 2019/20, beginning on and after 6th April 2019.

The personal allowance currently sits at £11,850, however, following the recent budget the new personal allowance will increase to £12,500 for 2019/20. In addition to this, the basic rate band will also increase in 2019/20 to £37,500 so that the threshold at which the 40% band applies is £50,000 for those who are entitled to the full allowance. The rate of tax of 45% will remain payable on taxable income above £150,000.

From 2021 to 2022 onwards, the Personal Allowance and basic rate limit will be indexed with the Consumer Price Index (CPI).

Changes to the basic rate limit, and higher rate threshold, will apply to non-savings, non-dividend income in England, Wales and Northern Ireland, and to savings and dividend income in the UK.

Director at Harvey Telford and Bates, Danielle Harvey added: “The changes to the Personal Allowance and the basic rate limit are not changes to ignore and will affect a lot of people. We want to make sure that our customers, new and existing, are getting the appropriate advice and support to help them adjust to the changes that will begin next year.”

For more information on the Personal Allowance and basic rate limit visit GOV.UK income tax or visit our tax planning page.

Call a member of our team today on 01743 462604 or email us at hello@htbaccountants.co.uk.

 

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