personal tax allowance

Personal Finance

Employers not ready for Personal Allowance Increase

Employers are unprepared for the increase in personal income tax allowance which comes into effect this month, tax experts have warned. From 7th September, the basic tax–free allowance for employees will increase by £600, from £5,435 to £6,035, giving most employees an extra £120 a year. The increase was announced by the Chancellor in May following his decision to scrap the 10 pence tax band. Because the allowance will be backdated to the beginning of the tax year, most employees’ pay packets will contain £60 more than usual in September – but only £10 more thereafter. Mark Lee, chairman of the Tax Advice Network said: “Staff may be aware that the increase in their take–home pay will be because of the tax changes. However, t... »

Personal Tax Allowances up £600

After abolishing the 10p tax rate in the Budget 2008, Alistair Darling has made a concession to low earners. At a cost of £2.7 billion, Alistair Darling, the Chancellor of the Exchequer, has increased the personal tax allowance by £600 to £6,035 for this financial year. The move, benefiting all basic rate tax-payers under the age of 65, will see 22 million low and middle income earners be £120 better off this year, as "compensation" for the scrapping of the 10px tax rate. The additional £120 is expected to be paid in a £60 rebate in September with £10 extra in workers’ pay packets until the end of the tax year. »