Government increases personal allowance

Autumn Statement 2012: The government will increase the personal allowance by an additional £235 as part of its commitment to make the first £10,000 of salary free from income tax.

During his presentation of the Autumn Statement, Chancellor George Osborne announced that the personal allowance will rise to £9,440 in April 2013.

The personal allowance is currently set at £8,105. Under measures announced in the 2012 Budget in March, it had been due to increase to £9,205 in April next year. This will result in a total increase in the personal allowance of £1,335 next April.

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Osborne said: “That’s £47 extra in cash next year. In total, that’s a £267 cash increase next year.

“People working full time on the minimum wage, will have seen their income tax bill cut in half.  And we are within touching distance of the £10,000 personal allowance.”