Important income tax changes unveiled as part of Monday’s Budget announcements will help UK workers to save hundreds of pounds in tax each year, it has emerged.
According to an analysis carried out by Moneysavingexpert.com, individuals earning between £8,632 and £46,384 can expect to save £155 in tax each year, while those earning more will benefit from even greater savings.
The news comes after the Chancellor, Philip Hammond, confirmed that the personal allowance would rise from its existing £11,850 to sit at £12,500 from April 2019.
Originally, the personal allowance, which is the amount each individual is allowed to earn before they incur income tax, was not due to increase by this much until the following year.
However, among a series of important changes announced as part of the Autumn Budget, Mr Hammond has said that the increase would be implemented a year early.
As well as changes to the personal allowance, the Chancellor also confirmed that the threshold above which the higher 40 per cent rate of income tax is incurred would also be increased from £46,530 to £50,000.
Moneysavingexpert.com said that higher rate taxpayers could expect to save approximately £566 a year once the new changes have been implemented in April.
This is due to the fact that, while such earners will pay £294 more in National Insurance (NI), they will benefit from a £860 saving due to the new changes to the personal allowance and higher rate thresholds.