The personal allowance will align with the Government’s much publicised goal of £10,000 in 2014/15. This is a year earlier than previously announced and reflects an increase of £560 on the 2013/14 tax free amount of £9,440.
The Chancellor gives with one hand and takes away with the other, shrinking the basic rate band by a corresponding £560 from £32,010 to £31,865 in 2014/15.
The national insurance upper earnings limit will once again remain in line with the threshold at which income is taxed at 40%, and will therefore reduce by an equivalent amount.
Additional personal allowances remain frozen
As previously announced, additional personal allowances have remained frozen at £10,500 for those born between 6 April 1938 and 5 April 1948 and £10,660 for individuals born on or before 5 April 1938.
The announcement of the £10,000 personal allowance for individuals born after 6 April 1948 has brought the abolition of age related allowances, ever closer.