Budget 2013: Personal allowance upped to £10,000 early

20 March 2013

The annual personal income tax allowance will rise to £10,000 by April 2014, saving £700 for low-paid workers. 

Chancellor George Osborne announced the government would bring forward the planned rise in the allowance to next year, sooner than the scheduled end of parliament deadline.
The personal allowance, the point at which earners start to pay income tax, is currently £8,105 and will rise to £9,440 next month. 
Of the £10,000 allowance, Osborne said: "That's £700 less in tax for working families than when this government came to office.
"Almost three million more of the lowest paid will pay no income tax at all. It's an historic achievement for this government and for hard working families across the country."
George Charles, marketing director at vouchercodespro.co.uk, welcomed the Budget as "one for the working man".
"In our office, we were all set to disparage the proposals put forward in the budget, but there was a surprising level of optimism based on the announcements. The planned rise in the income tax threshold to £10,000 is a real positive for low income households," he said. "Hand in hand with this is the cancellation of the fuel duty rise, as high fuel prices are a real bugbear in the day-to-day budgeting of our users."
However, Chas Roy-Chowdbury, head of taxation at the Association of Chartered Certified Accountants (ACCA), said the move does little to help higher-rate taxpayers: "The personal tax allowance increase, on the face of it, looks good, but it will only benefit the population who are currently 20% taxpayers, of which there are fewer and fewer. 
"By dropping the threshold for the 40% income tax bracket, many hardworking people who will begin paying 40% for the first time will not just lose the benefits of the increased personal allowance they will actually need to pay additional tax on such things as savings and dividends because of the way the UK system taxes the top slice of income."

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