Income Tax: Tax Allowances

HM Treasury written question – answered on 28th October 2015.

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Photo of Henry Smith Henry Smith Conservative, Crawley

To ask Mr Chancellor of the Exchequer, what plans he has to raise the income tax personal allowance during this Parliament.

Photo of David Gauke David Gauke The Financial Secretary to the Treasury

The government has committed to raising the income tax personal allowance to £12,500 by the end of this parliament, alongside our commitment to raise the higher rate threshold to £50,000. These changes will benefit over 30 million individuals.

Summer Budget 2015 set out the first step in meeting this commitment. The personal allowance will increase from £10,600 in 2015-16 to £11,000 in 2016-17, and £11,200 in 2017-18.

These changes will benefit over 29 million individuals and take 570,000 individuals out of income tax altogether by 2016-17. This will increase to over 660,000 by 2017-18. A typical basic rate taxpayer will see their income tax bill reduced by £905 by 2016-17, compared to 2010.

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