Budget Speech 2019
Announcements in Budget speech 2019 , MILLIONS of basic-rate tax payers will get a boost in their pay packet from April 2019 as Chancellor announced new tax free allowance for 2019. The tax free personal allowance will be increased from £11,800 to £12,500
It is also a winning situation for Higher rate tax payers who will also benefit for extension of basic rate band and they won’t pay tax at higher rate unless they earnover £50K mark. This could make them better off by up to £860 a year as confirmed in the budget speech.
However where this budget will make taxpayers better off this measure will cost treasury £5bn altogther approx.
These same thresholds were pledged by government already but was not going to start till April 2020, but instead that brexit uncertainly and waiting for Britain to leave government has confirmed this will happen sooner rather than later.
Currently the tax free allowance is set at £11,850 and after this you pay tax at 20% until your earnings are over and above £46,350. Anything over and above this is taxed at 40% until the next band kicks in at £150K from where additional tax payer pays tax at 45%.
Future rates were announced by the Chancellor in the Budget, in line with those recommended by the LPC. The National Living Wage (NLW), the statutory minimum for workers aged 25 and over, will increase by 4.9% to £8.21 per hour. Rates for young people will increase above inflation and ave. earnings. All of these will apply from 1 April 2019.
The LPC’s rate recommendations comprised: Current , New rate and Increase % are as follows.
NLW £7.83 £8.21 4.9%
21-24 rate £7.38 £7.70 4.3%
18-20 rate £5.90 £6.15 4.2%
16-17 rate £4.20 £4.35 3.6%
Apprentice rate £3.70 £3.90 5.4%
£7.00 £7.55 7.9%
See full table guidance here
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