Tax cuts in the Budget

Hammond unveils tax cuts From next April people will be able earn £12,500 a year tax-free and will not pay 40% tax until they earn more than £50,000. Those earning £12,500 will save £130 a year compared to their current income tax bill thanks to the rise in the personal allowance. Those earning £50,000 will keep an extra £860 compared to their current income tax bill, reduced to £520 once NI is taken into account. Mr Hammond focused on the benefits for lower earners. “I didn’t come into politics to put taxes up,” he told MPs. “This is a tax cut for 32m people, £130 in the pocket of a typical basic-rate taxpayer, meaning since 2015 we’ve taken 1.7m out of tax altogether and nearly one million out of higher-rate tax.” The changes will cost the Treasury an estimated £2.79bn.