£1,000 extra in your pay since new tax cuts

Chancellor Philip Hammond said the average taxpayer will have an extra £1,075 in their pocket as the new tax cuts kicked in on 6 April

The amount you can earn without paying income tax rises from £11,500 to £11,850 – which works out as a tax cut of £70 for most people.

The starting point for paying 20 per cent basic rate tax will now be £11,850, while the 40 per cent rate will start on income above £46,350 – up from £45,000. Hammond said on 5 April: ‘Today’s increase in the personal allowance means that everyone will pay less income tax.

‘A basic rate taxpayer will pay £1,075 less income tax then they did in 2010.’ Hammond added that pensioners, on a full basic state pension, will receive an extra £180 a year.

And students are set to save £360 per year as the threshold for repaying their loans will rise from £21,000 to £25,000.

National insurance will be charged at 12 per cent of income over £8,424 (up from £8,164), until the payer is earning more than £46,350, where the rate drops to 2 per cent. The National Living Wage will rise by 4 per cent, from £7.50 an hour to £7.83.

However, the average council tax bill will rise by 5.1 per cent. Hammond wrote in the Daily Telegraph: ‘My commitment to keeping taxes low means I would like to do more to enable people to keep even more of the money they earn.’

While England, Wales and Northern Ireland will all benefit, the changes do not apply in Scotland where some basic rate taxpayers will pay less, but those earning £33,000 or more can expect a higher bill.

TNT News

Photo Credit: EU2017EE

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