Budget 2015- Personal allowance increase
Personal allowances and thresholds will increase as follows:
Basic (20%) Rate Limit
Higher (40%) Rate Threshold
MHA MacIntyre Hudson comment
The Chancellor is continuing the agenda pursued by the coalition government by increasing the personal allowance. This is a costly measure as it affects all taxpayers (apart from certain individuals such as those earning over £100,000 per year or UK resident non-domiciled taxpayers claiming the remittance basis of taxation). The number of taxpayers paying tax at the 40% rate increased by 46% between 2010 and 2014* so the increase in the higher rate threshold, while welcome, is not particularly significant. The Conservatives’ election pledge to increase the higher rate threshold to £50,000 by 2020 will require large increases in the threshold in the last two years of this parliament if it is to be achieved.
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