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BUDGET 2012: Tax free threshold to rise £1,100 21 March 2012

Britons are to receive a boost to their take home pay after the government revealed a large increase in the tax-free allowance for personal income.

Chancellor George Osborne confirmed that the coalition government is increasing the personal allowance by £1,100 to £9,205 in April 2013.

Osborne said this represented the largest ever increase in the level of the personal allowance in both cash and real terms for the past 30 years.

He said: “I want to go much further and faster. I am announcing the largest ever increase in the personal allowance. From next April, it will increase by £1,100. Every working person can earn up to £9,205 before they pay any tax.

“As a result of our Budget, people working on the minimum wage will have seen their income tax bill cut in half, taking two million of the lowest paid people in our country out of tax all together.

“This government has not settled for a do-nothing budget. It is a simple tax code and a country where the citizens know what they are paying and what they are paying it for.”

However, the rate for higher rate taxpayers will also change, meaning the 40 per cent threshold will now start at £41,450 in 2013, down from the current rate of £42,475, drawing more people into the 40 per cent bracket.



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