Summer Budget 2015: The tax-free personal allowance will increase to £11,000 a year, Chancellor George Osborne announced during his Summer Budget speech today (8 July).
In 2016-17, employees who earn up to £11,000 a year will not pay income tax. The new tax-free personal allowance threshold represents an increase of £400.
Osborne also announced that the higher-rate tax threshold will increase to £43,000 a year.
He said: “I am raising the tax-free personal allowance to £11,000 next year. That’s £11,000 you can earn before paying any income tax at all- boosting wages by over £900 in total, and a down payment on our goal of reaching £12,500.
“We will now legislate so that after that the personal allowance always rises in line with the minimum wage, and we never ask the lowest paid in our society to pay income tax.
“The higher rate threshold currently stands at £42,385. I am today raising it to £43,000 from next year. It marks a strong start to our commitment to raise the threshold to £50,000.”
