Personal tax allowance to rise: Autumn Statement 2014
The majority of workers will pay less in tax from April next year, after Chancellor George Osborne has today announced that the amount people can earn tax free will rise.
From April 2015, the Government will raise the amount of income workers can earn before they pay tax to £10,600 (see our Income Tax Checker for what you pay now).
The current personal allowance is £10,000 and was due to rise to £10,500 next April.
The Government says the increase in the personal allowance will mean 24.4 million people pay less tax, while a further 430,000 will no longer pay any income tax in 2015-16.
The higher-rate tax threshold, above which income is taxed at 40%, will also increase from £42,285 to £42,385 in 2015-16 as a direct result of the move to up the tax free personal allowance.
See our table below for a summary of the new tax thresholds:
Income tax thresholds
| Tax year | Personal allowance for under-65s (you pay no tax on this amount) | Basic rate (20%) - paid on earnings between | Higher rate (40%) - paid on earnings between | Additional rate (45%) |
|---|---|---|---|---|
| 2014/15 | £10,000 | £10,000-£41,865 | £41,865 to £150,000 | Over £150,000 |
| 2015/16 | £10,600 | £10,600-£42,385 | £42,385 to £150,000 | Over £150,000 |
This is just the tax you pay, most people also pay National Insurance contributions. | ||||
See the tables below for how much take home salary you'll get this tax year compared to next tax year once National Insurance contributions have been factored in.
2014/15 take home pay
| Salary (pre-tax) | Tax paid | National Insurance paid | Take home salary (post tax) |
|---|---|---|---|
| £10,000 | £0 | £245 | £9,755 |
| £20,000 | £2,000 | £1,445 | £16,555 |
| £30,000 | £4,000 | £2,645 | £23,355 |
| £40,000 | £6,000 | £3,845 | £30,155 |
| £50,000 | £9,627 | £4,231 | £36,142 |
| £60,000 | £13,627 | £4,431 | £41,942 |
| £70,000 | £17,627 | £4,631 | £47,742 |
| £80,000 | £21,627 | £4,831 | £53,542 |
| £90,000 | £25,627 | £5,031 | £59,342 |
| £10,000 | £29,627 | £5,231 | £65,142 |
This table is just for people who are employed. It doesn't apply to the self-employed. | |||
2015/16 take home pay
| Salary (pre-tax) | Tax paid | National Insurance paid | Take home salary (post tax) |
|---|---|---|---|
| £10,000 | £0 | £232.80 | £9,767.20 |
| £20,000 | £1,880 | £1,432.80 | £16,687.20 |
| £30,000 | £3,880 | £2,632.80 | £23,487.20 |
| £40,000 | £5,880 | £3,832.80 | £30,287.20 |
| £50,000 | £9,403 | £4,271.30 | £36,325.70 |
| £60,000 | £13,403 | £4,471.30 | £42,125.70 |
| £70,000 | £17,403 | £4,671.30 | £47,925.70 |
| £80,000 | £21,403 | £4,871.30 | £53,725.70 |
| £90,000 | £25,403 | £5,071.30 | £59,525.70 |
| £10,000 | £29,403 | £5,271.30 | £65,325.70 |
This table is just for people who are employed. It doesn't apply to the self-employed. | |||
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10 December 2024
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