The majority of Britons will pay less income tax from April 2019 following important changes announced in this week’s Autumn Budget.
Running through his Budget announcements on Monday, Chancellor Philip Hammond confirmed that impending income tax changes which originally were not meant to take effect until 2020 would be rolled out a year in advance.
He confirmed that from next April, the personal allowance – the amount people can earn before paying the basic 20 per cent rate of income tax – would be increased from £11,850 to £12,500.
Further changes will see the higher rate (40 per cent) tax band not be triggered until an individual is earning £50,000 or more, as opposed to the current £46,350.
In recent days, an in-depth analysis of Mr Hammond’s income tax cuts carried out by The Resolution Foundation has voiced concerns that the changes will “overwhelmingly benefit richer households.”
According to the think tank’s analysis, almost half of the cuts announced will benefit the top 10 per cent of UK households, while 84 per cent will go to the top half of UK income distribution in 2019.
Meanwhile, a separate post-Budget analysis carried out by Money Saving Expert suggests that Britons earning between £8,632 and £46,384 will find themselves approximately £155 a year better off due to the changes to the personal allowance and National Insurance (NI).
For those earning between £46,384 and £50,024, the savings they will enjoy are somewhat more complicated and how much people will benefit will be dependent on their individual earnings.
Meanwhile, those earning between £50,024 and £100,000 should expect to save around £566 a year. This is because they will pay £294 more in NI, but will save £860 due to personal allowance and higher rate tax changes, the analysis says.