Autumn Budget 2017 – Income Tax Rates & Allowances
The Chancellor has confirmed that from 2018-19 the personal allowance will increase to £11,850 (an increase from the current £11,500) and the basic rate limit to £34,500. As a result, the higher rate threshold will increase to £46,350 from April 2018. These increases are part of the government’s commitment to increase the basic personal allowance to £12,500 and the higher rate threshold to £50,000 by the end of the current Parliament. The Scottish Parliament sets the basic rate limit for Scotland meaning that Scottish higher rate taxpayers may pay more tax in 2018-19.
For high earning taxpayers, the personal allowance is gradually withdrawn by £1 for every £2 of adjusted net income over £100,000 irrespective of age. Adjusted net income is total taxable income before any personal allowances, less certain tax reliefs such as trading losses and certain charitable donations and pension contributions. Any taxpayers with an adjusted net income of between £100,000 and £123,700 in 2018-19 will pay an effective marginal rate of tax of around 60% for tax payers as the tax-free personal allowance is gradually withdrawn.
It has also been confirmed that there will be no increase in the starting rate for savings income band which will remain at £5,000 during 2018-19. This rate applies across the UK.
Source: HM Government | 23-11-2017