Chancellor George Osborne has announced an array of tax changes in today’s Budget, so Moneywise has rounded-up the key changes below.
The announcement included two new personal allowances.
The first is an allowance for income from properties. People will be able to earn £1,000 tax-free in rental income, perhaps by renting out a garage, renting office space to freelancers, or renting a room for holidaymakers via AirBnB.
This is on top of the existing rent-a-room allowance, which lets families receive up to £7,500 rental income from a lodger before tax is due.
The second new allowance is for ‘occasional jobs’. People earning extra cash through boutique businesses will be able to earn £1,000 before tax is due.
All of these allowances, as well as the new savings allowance, can be stacked on top of your personal allowance.
So from April, if you make all your money by selling jewellery on eBay, for example, you can add the £1,000 ‘occasional jobs’ allowance to your £11,000 personal allowance, meaning you can make £12,000 before you have to start paying income tax.
The table below details the full tax rates (click to enlarge):