Tax Rates 2016-17
As announced in the budget, the personal tax allowance is being increased to £11,000 from 6th April 2016. This means that the first £11,000 of your income will be tax free. The new allowance is £400 more than the previous year and is expected to be increased to £11,500 in 2017-18.
This allowance will apply to everyone regardless of their age. The changes have been made in light of government’s pledge to support those on low and middle incomes.
Here is a tabular reflection of the new income tax rates from April 2016.
|Upto £11,000||NO TAX|
|The next £32,000||20%|
|The next £118,000||40%|
These allowances are expected to reduce income tax for 29.1m tax payers (24.3m basic tax payers and 4.8m higher tax payers) in 2016-17 and 29.6m in 2017-18 including low and middle income individuals, thereby improving incentives to enter employment and increasing disposable incomes.
The change in personal tax allowance will cost HMRC £418,000 to update their IT systems to reflect the tax code changes.
If you have any questions about the new tax changes, do not hesitate to contact our team on 01252 704 030.
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