As a result of a landmark Government policy and a key plank of the long-term economic plan, over 3 million people will have been taken out of income tax altogether from this weekend thanks to a series of increases in the tax-free personal allowance to £10,000 in 2014-15.
This means that overnight on Sunday, an extra 200,000 hard-working people will no longer pay income tax.
Over 26 million people – the vast majority of working people – will have benefited from the personal allowance increases over the past four years. This year’s rise means that the typical taxpayer is now paying £705 less income tax than they were in 2010. Over the lifetime of this parliament, the cumulative income tax cut by this government for the typical taxpayer will be £1,824.
Ahead of a visit to the North West today with workers who will benefit, the Prime Minister 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. Nearly nine out of ten hard-working people across the country will benefit from this tax cut on Sunday – and it’s one of the proudest things I have done in Government.”
As the Prime Minister has said before, it is right that changes to the tax system benefit typical basic rate taxpayers the most. The new changes on Sunday 6th April also mean that:
*Someone currently working full-time on the national minimum wage will pay nearly two thirds less income tax than at the election; and
*Someone working for around30 hours a week will not pay any income tax at all.
This means that we are supporting many of those who work flexibly and part-time. And we are also helping women, who are the majority (54%) of the 3 million people who no longer have to pay income tax thanks to the increases to the personal allowance since 2010.
And as the Chancellor announced in the Budget, the personal allowance will help even more hard-working families next year when it is increased again to £10,500.