At Budget 2014, the government announced that the personal allowance would increase to £10,500 from April 2015.
This rise has been increased by £100 so that the personal allowance will now be £10,600 in 2015/16.
In addition the full increase will be passed on to higher rate taxpayers so that the point at which higher rate income tax is paid will increase from £41,865 in 2014/15 to £42,385 in 2015/16.
The increase in personal allowances from 2014/15 to 2015/16 will be worth £120 to a typical basic rate taxpayer and £172 to a typical higher rate taxpayer.
The government has also reiterated its wish to ultimately raise the personal allowance to £12,500 – so that people working full time on the minimum wage will pay no tax at all.