Press release

Taxpayers up to £860 better off as Personal Allowances increase early

29 October 2018

Patricia Mock, Tax Director, comments on the Personal Allowance changes:

“In a welcome boost to taxpayers and perhaps a surprising move, the Chancellor announced that the personal allowance and higher rate threshold will rise to £12,500 and £50,000 in 2019/20 (£11,850 and £46,350 in 2018/19), meeting the Manifesto commitment a year early.

“This will mean an annual tax saving of £130 for basic rate taxpayers, up to £860 for higher rate taxpayers and £600 for those with income of more than £125,000 in England and Wales. The Scottish rates which will apply to earnings and pension of taxpayers resident in Scotland will not be announced until the Scottish draft Budget on 12 December. 

“This is a costly move for the Chancellor; estimated to cost £2.79bn in 2019/20.

“The rates and thresholds for national insurance will affect these giveaways for those earning, as the lower earnings threshold is lower than the personal allowance. This has been increased from £8,424 to £8,632 with the upper earnings threshold being increased to match the higher rate income tax threshold of £50,000.  This means a Class 1 National Insurance saving for basic rate taxpayers of £25, and an increase for higher rate and additional rate earners of £340, giving an overall tax and NIC decrease for basic rate employees of £155, higher rate employees of up to £520 and those earning more than £125,000 of £260.”



Note to editors

Follow us on Twitter: 

@DeloitteUK for live comment;

@DanielFLyons1 for Daniel Lyons, Head of Tax Policy; and

@IanStewartEcon for Ian Stewart, chief economist

Deloitte spokespeople

Experts from Deloitte are available now and on the day of the Budget for comment. On Monday 29 October, please call the Deloitte Media hotline on 020 7007 3333, where you will be directly connected to one of our spokespeople.

About Deloitte

Deloitte LLP is the United Kingdom affiliate of Deloitte NWE LLP, a member firm of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee (“DTTL”). DTTL and each of its member firms are legally separate and independent entities. DTTL and Deloitte NWE LLP do not provide services to clients. Please see About Deloitte to learn more about our global network of member firms.