Budget 2015 – Income Tax and National Insurance – is it good news for you?

20th March 2015

Budget 2015 – Income Tax and National Insurance – is it good news for you?

 

The Budget delivered some welcome news with changes to Personal Allowances, Basic Rate Limits and National Insurance.

For those born after 5 April 1948, the Personal Allowance for the 2016/17 tax year will increase to £10,800 and £11,000 the year after. In addition, the basic rate limit for 2016/17 will be increased to 31,900 and to £32,300 the year after.

This means that the higher rate threshold will increase to £42,700 in 2016/17 and £43,300 the following year.

It has also been announced that the National Insurance Limits will increase to keep in line with the higher rate threshold.

With the announcement that Class 2 National Insurance contributions are to be abolished, saving self-employed individuals £143 per annum alone, this budget will give those on the lowest incomes a boost.

However, although the increase of the higher rate threshold is welcome, this threshold has dropped behind inflation and as a result more and more hardworking individuals are suffering higher rate tax on some of their income.

 

Written by Luke Thomas, Director

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