The Chancellor reminded us that the government are committed to increasing the personal allowance to £12,500 in 2020 and the higher rate tax threshold to £50,000. However, the personal allowance for 2018/19 was only increased in line with inflation to £11,850 and the higher rate threshold to £46,350.
Note that up to 10% of the personal allowance (£1,185) may be transferred from one spouse or civil partner to the other if unused and the transferee is a basic rate taxpayer. This transfer will now be available on behalf of deceased spouses and civil partners, and the claim may now be backdated for up to four years where the entitlement conditions were met.
And finally, the personal allowance is slowly eroded once your earnings in the tax year exceed £100,000 reducing by £1 for every £2 earned above that limit.
Remember, the personal allowance bigins to be withdrawn once earnings exceed £100,000 per tax year.
Please contact a member of our team if you would like to discuss any of the issues raised.