Following the victory for the Conservatives in the General Election, there are expected to be number of changes to personal taxation.
According to their manifesto, the Conservatives will not raise income tax or National Insurance (NI) and will cut tax for 31 million workers by raising the NI threshold from £8,632 to £9,500 next year.
This will mean an extra £104 to someone on £25,000 a year, while if the personal allowance for income tax is also raised to £12,500, this would add almost £500 a year to people’s pockets.
In a boost to older people, the party promised to keep the triple lock, which guarantees state pension rises of at least 2.5 per cent, the winter fuel payment, the older person’s bus pass and other pensioner benefits.
However, there is no sign of a re-think on the party’s stance on axing free TV licences for the over-75s.
The Conservatives also promised a comprehensive review of how to fix a tax anomaly which has seen workers, mostly women, earning between £10,000 and £12,500 lose pension top-ups automatically paid to the better off.
The party also said they would establish a £1 billion fund to help create more high quality, affordable childcare. Current childcare policies only cover three and four-year-olds in working families and amount to 30 ‘free’ hours a week. There is also Tax-Free Childcare which offers qualifying parents up to £500 every three months.
For help and advice with any aspect of tax contact a member of our team today.