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Budget 2015: Personal allowance to rise to £11k by 2017

The income tax personal allowance is to rise to £11,000 in 2017/18, Chancellor George Osborne has announced.

In his final Budget before the General Election, Osborne confirmed the personal allowance will rise from its current level of £10,000 to £10,600 next month as planned.

He said the allowance will increase to £10,800 in 2016/17, and to £11,000 in 2017/18.

The Chancellor said this will mean the typical taxpayer is £900 a year better off.

Osborne said: “When we came to office, the personal tax-free allowance stood at just £6,500. We set ourselves the goal of raising that to £10,000 by the end of the parliament.

“We have more than delivered on that promise. In two weeks’ time it will reach £10,600. That’s a huge boost to the incomes of working people and one of the reasons we have a record number of people in work.”

Osborne also announced the threshold at which people pay the higher rate of income tax will rise from £42,385 this year to £43,000 by 2017/18.

He said: “For the first time in seven years, the threshold at which people pay the higher tax rate will rise not just with inflation – but above inflation.”

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