Personal Allowance

The personal allowance is currently £10,600, but will rise to £11,000 for everyone from April 2016 and to £11,200 from April 2017.

The Chancellor set out the government’s objective to raise the personal allowance to £12,500 in the lifetime of this Parliament.  Once the personal allowance has reached £12,500, it will automatically increase to match the equivalent of 30 hours a week at the national minimum wage for those aged over 21.

The basic rate band for income tax is currently charged on the first £31,785 of taxable income, but will increase to £32,000 in 2016/17 and £32,400 in 2017/18.

As a result, the higher rate tax threshold (taking into account the standard personal allowance), which is currently £42,385, will rise to £43,000 in 2016/17 and £43,600 in 2017/18.

The Chancellor also stated that the government’s aim was to increase the higher rate tax threshold to £50,000 by 2020.

For taxpayers who have income over £100,000 in a tax year, the personal allowance will continue to be withdrawn.  £1 of the personal allowance is lost for every £2 of income over the £100,000 threshold, so in 2015/16 people with income over £121,200 will not receive any personal allowance.  The £100,000 threshold will remain unchanged in 2016/17 and 2017/18.

The additional rate of 45% will continue to apply to income of over £150,000 in 2015/16.  This threshold should also apply to the 2016/17 and 2017/18 tax years.

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Aug 16

No events today
I just wanted to say thank you for the meeting yesterday. I have been in the practice for 20 years now and I have to say that your time with us has definitely been the best support we have been given, both in terms of actual "numbers" but also in personal service, support, explanation and confidence. I have seen a real increase in my partners understanding of their accounts and a reduction in their anxiety etc since you have been our accountants. Just wanted to thank you for this.
-- Dr Andrew Dearden