Budget 2014 – Changes to personal tax allowances and tax rates for those born after 5 April 1948

As previously announced, the personal allowance for those born after 5 April 1948 will rise to £10,000 from 6 April 2014 and the level of income after which taxpayers begin to pay 40% will increase by 1% from £41,450 to £41,865 for 2014/15.

For 2015/16, the personal allowance will be increased to £10,500 and the ‘higher rate threshold’ will increase to £42,285.

The increase in the personal allowance will take 288,000 individuals out of income tax altogether in 2015/16. A benefit of £420 derived from increased personal allowances in 2015/16 will be passed onto higher rate taxpayers.