BUDGET 2017: Personal allowance and minimum wage to rise next year
The personal allowance – the amount of money you can earn before you start paying income tax – will rise with inflation from the current level of £11,500 to £11,850 from April 2018.
Philip Hammond said this means that in the 2018/19 tax year, a typical taxpayer will pay around £1,075 less than in the 2010/11 tax year.
However, in the Spring Budget earlier this year, the Chancellor already committed to raising the personal allowance to £12,500 by 2020.
For higher rate taxpayers, the threshold will rise from £45,000 to £46,350 in April 2018, though the government has already committed to raising the higher rate threshold to £50,000 by 2020.
Minimum wage rise
Hammond said that unemployment in the UK stands at 1.4 million which is “1.4 million too many” and while the proportion of full-time jobs that are low paid is at its lowest level for 20 years, he committed to raising minimum wage rates.
The National Living Wage (NLW) was launched in April 2016 for all working people aged 25 and over.
The rate currently stands at £7.50 an hour, but the Chancellor announced that this will rise 4.4% to £7.83 from April, benefitting over two million people. This move will add £600 to annual incomes for full-time workers.
Turning to the National Minimum Wage (NMW) for those aged under 25, Hammond committed the following wage rises from April 2018: