Cheltenham01242 237661
Gloucester01452 634800
Staverton01242 680000
News & Publications

Personal allowance increase

◄  Return to News
21 March 2012

The personal allowance will increase by £1,100 from £8,105 to £9,205 in 2013-14.  This is in line with the Government’s much publicised intention to eventually allow individuals to earn £10,000 per year tax free. 

The basic rate band will be decreased by £2,125 from £34,370 to £32,245 in 2013-2014, effectively meaning that those already paying higher rate tax do not benefit from the increased allowances.

The national insurance upper earnings limit will remain aligned with the threshold at which income is taxed at 40%, and will therefore reduce by equivalent amounts, although no announcement has been made about the lower earnings limit.

Additional Personal Allowance Freeze

From 6 April 2013 age related allowances will be restricted and ultimately withdrawn altogether.  Individuals born after 5 April 1948 will only qualify for the standard personal allowance with no access to the increased age related allowances currently in existence. 

For those born between 6 April 1938 and 5 April 1948 the allowance of £10,500 will be frozen at that level, and for those born on or before 5 April 1938 the frozen amount will be £10,660.  When the personal allowance aligns with these amounts, age related allowances will be abolished altogether.

For those with large incomes, such that the age related allowance is already tapered to nil, the change will actually be of benefit.  However, for those on smaller incomes who benefit from the age related allowance, the lack of inflationary increase will amount to an increase in tax liability.
 

Contact us



Our News

See all news