Increase in Personal Tax Allowance and National Insurance Thresholds

Posted by Grant Saunders

Personal Allowance to rise

Chancellor Philip Hammond announced in the Autumn Budget that the personal allowance for income tax will be increased from £11,500 to £11,850 from April 2018, while the threshold at which you pay a higher rate of income tax will rise from £45,000 to £46,350.

The announcement means most taxpayers will be able to earn £11,850 before they pay a penny of income tax from the start of the next tax year. A basic rate taxpayer will be £70 better off. The move will apply to everyone who earns under £100,000 a year.

New Income Tax Allowance 2018-19 2017-18 (£) 2018-19 (£)
Personal Allowance 11,500 11,850

National Insurance changes

National Insurance rates and threshold have been set for 2018/19. The lower earnings limit for Class 1 National Insurance purposes will increase to £116 per week, the primary and secondary thresholds to £162 per week and the upper earnings limit, upper secondary threshold and apprentice upper secondary threshold to £892 per week.

The main primary rate of class 1 remains at 12%, the additional rate is set at 2% and the secondary rate at 13.8%. Class 1A and Class 1B NIC are also unchanged at 13.8%. The Employment Allowance remains at £3,000.

Class 1 National Insurance thresholds 2018 to 2019
LEL £116 per week
£503 per month
£6,032 per year
Primary Threshold (PT) £162 per week
£702 per month
£8,424 per year
Secondary Threshold (ST) £162 per week
£702 per month
£8,424 per year
Upper Secondary Threshold (under 21) (UST) £892 per week
£3,863 per month
£46,350 per year
Apprentice Upper Secondary Threshold (apprentice under 25) (AUST) £892 per week
£3,863 per month
£46,350 per year
Upper Earnings Limit (UEL) £892 per week
£3,863 per month
£46,350 per year

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