Personal allowance and higher tax rate threshold increased

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The personal allowance and the threshold for the higher rate of income tax are both set to increase from next April.

The Government has pledged to move the personal allowance to £12,500 by the end of this Parliament.

It was already due to increase £11,000 next month, but Chancellor George Osborne says it will then increase to £11,500 next April.

At the same, the threshold at which employees pay the higher 40 per cent rate of income tax will move from £42,385 to £45,000.

Osborne says: “We have delivered a Budget for working people.”