As part of the government’s recent Spending Review we were made aware of a fairly unexpected commitment to further increase in tax allowances as well as increases to Tax and National Insurance thresholds. It is therefore confirmed that the personal tax allowance, currently set at £12,500 per year as well as the current Higher Rate Threshold, currently £50,000 in England, Wales and Scotland will increase by a minimum of Consumer Price Index (CPI) and this as usual will pass on to the 3 National Insurance classes and their thresholds all with effect from the 6th of April 2021. Actual increases are yet to be confirmed, however, the figure of CPI currently sits at approximately 0.5%.
There had been a forecast regular increase in place through to 2023/24, however, with the continuing challenges due to the spending requirements to support the coronavirus pandemic this has been currently removed.
Further details on the spending review can be found here.
