New tax allowance

Know Your Correct Tax Code

£10,000 income tax allowance

As widely predicted, the government chose to increase personal allowance to £10,000 from next year, fulfilling the Coalition's election promise a year early.

It’s increasing by £560 to £10,000 in 2014-15 and will take 2.7m low income individuals under 65 out of income tax altogether.

“The increase to the £10,000 personal allowance isn’t a big surprise, but the fact it’s been done a year earlier is,” said John.  

One mystery we are still trying to track down is the decrease from 10% to 0% starting rate for savings, mentioned in the Budget statement by Chancellor Osborne, but as yet nothing has appeared about it in official documents.

Read more on the HMRC website