During Budget 2015 it was announced that personal allowance and basic rate limit for 2016/17 will be raised slightly. This is to show that the Government is actively supporting those on lower and middle incomes.
The personal allowance of tax free earnings will be increased to £11,000 for 2016-17. The basic rate limit will be increased to £32,000 for 2016-17, still taxed at 20% as per today’s rates. The higher rate earnings remains as £150,000 in 2016-17, with a top bracket of 45% for income over £150,000.
There will be one income tax personal allowance regardless of an individual’s date of birth.
Back in 2010/2011, the personal allowance was only £6,475 so we have come a huge step in the right direction since then!
Don’t forget about the MARRIED COUPLES ALLOWANCE which allows you to transfer up to £1,060 of your personal allowance to your spouse. This could save them £212 off their tax bill. This is quick and easy to apply for, just ask us if you would like help in setting this up.
Great news for those with a spare room and looking for a bit of extra cash: Rent a room relief is going up from the current £4250 threshold to £7500 in this tax year.
Please come in to see us or call us on 01275 873948 if you would like more information.