Personal allowance and UK higher rate tax limit increased early
26th November 2018 | Posted in: Allowances, Government Announcements, PAYE & NI, Personal Tax, PlanningThe UK Government’s manifesto pledge back in 2015 was that the personal allowance would rise to £12,500 in 2020 and the higher rate tax threshold to £50,000. The Chancellor announced in his recent budget that he has decided to bring forward these increases by one year and they will now take effect from 2019/2020. This will take an estimated 1 million taxpayers out of higher rate tax.
The Scottish higher rate threshold is currently different from the rest of the UK and we have different tax rates. The Scottish Government’s 2018 Budget is scheduled for 12 December 2018 and we will find out then what the plans are for the 2019/2020 Scottish tax rates and bands.
Note that up to 10% of the personal allowance (£1,250 from 6 April 2019) may be transferred from one spouse or civil partner to the other if unused and the transferee is a basic rate taxpayer. This could result in a tax saving of up to £238 in the current tax year. As previously announced, this transfer is now also available for deceased spouses and civil partners. Please contact us if you would like more information about this.
No changes to UK rates and dividend tax