The rise of the Personal Tax Allowance to £10,000 in 2014 will take as many as three million people out of the tax net and will help even more UK families next year when it is increased again to £10,500.
In his budget speech, the Chancellor said: “From 2014, there will be no Income Tax at all on the first £10,000 of your salary. That’s £700 less in tax for working families than when this government came to office. Almost three million more of the lowest paid will pay no income tax at all. It’s a historic achievement for this government and for hard-working families across the country.”
The 2014 Personal Allowance increase means overnight an extra 200,000 people are no longer paying Income Tax and that the typical taxpayer is now paying around £705 less Income Tax than they were paying in 2010.
Before his visit to Northwest England, Prime Minister David Cameron said, “A key part of this government’s long-term economic plan is to cut taxes so that people can keep more of the money they earn and feel more financially secure.”
He also described the move as one of the proudest things he has done in government.