The one thing the chancellor didn't mention that will affect your pay
The point at which you start to pay tax, and the point where you tip into paying a higher rate of tax have been frozen for three more years.
The chancellor John Healey did not mention in his recent Budget speech that the income tax thresholds, which have been frozen for the past five years, are expected to rise again after 2031. This decision has the potential to affect individuals' take-home pay and their tax brackets. Currently, only those earning under £12,570 pay no income tax, while the personal allowance threshold sets the point at which individuals start paying tax.
With the personal allowance frozen, the proportion of income taken in tax will continue to increase in line with previous Budget decisions. However, the government's Pension Tax Allowance means that individuals receiving income only from the state pension will not pay tax on it.
Written by urgent.news from BBC Business's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
