Meg Saksida looks at the impact and practical tips for taxpayers in respect of personal allowances and the additional rate band.
During his Budget speech in March 2021, the Chancellor of the Exchequer, Rishi Sunak, announced that as a part of the various schemes he was introducing to promote economic growth in the UK, both the personal allowance (PA) and the income tax bands would be frozen for the next four years.
Because of the Conservative’s 2019 election manifesto promise not to increase income tax (the ‘tax triple lock’), this freeze was seen to be a good way to address Covid-19 induced UK borrowing without breaking this promise. It has, however, been described as a stealth tax increase.
What are the details?
The PA in 2020/21 was £12