In today’s Budget, Chancellor George Osborne the milestone was “an historic achievement”, meaning about 3 million working people, who earn under £10,000 a year, will pay no tax at all.

He had previously pledged to hit the £10,000 threshold by the end of Parliament in 2015.

The move effectively replaces a 10p tax band suggested by Labour in February.

“We’ve turned a 10p tax band into a 0p tax band, and they won’t have to worry about it any more,” Osborne said, gesturing at the opposition benches.

In last year’s Autumn Statement, the Chancellor said the threshold for the 2013/14 income tax year would be £9,440, as part of a “central goal” of the coalition to support working families.

“We are in touching distance of the goal of £10,000 personal allowance that we all share,” he said in his 2012 Budget. 

The move is expected to cost the Exchequer about £1.4bn.