Matt Warman has welcomed further income tax cuts for hardworking people in Boston and Skegness, delivering on the Conservatives’ key election promise to raise the personal allowance.
In the Summer Budget, the Chancellor set out the next steps in his plan to support working people by ensuring they keep more of the money they earn:
• A downpayment on a £12,500 Personal Allowance: in 2016-17, the personal tax-free allowance will increase by £400 to £11,000, so that next year a typical rate income taxpayer will be £905 better off compared with 2010. This is part of our commitment to raise the allowance to £12,500 by the end of the parliament.
• Delivering on our promise to raise the higher rate threshold: in 2016-17, the threshold for the higher rate of tax will increase from £42,385 to £43,000, saving the typical higher rate taxpayer £142 and lifting 130,000 people out of the rate altogether. This is a first step on our commitment to raise the threshold to £50,000 by the end of the parliament.
The Summer Budget also introduced a new National Living Wage for over 25s to support people who work hard and do the right thing. The new National Living Wage will mean two and a half million people get a direct pay rise. Those currently on the minimum wage will see their pay rise by over a third this Parliament, a cash increase for a full time worker of over £5,000.
‘The new National Living Wage combined with these income tax cuts are excellent news for hardworking people in Boston and Skegness, and shows we will deliver what we promised. The rise in the personal allowance will mean lower taxes for around 47,000 working people here in our constituency, with an estimated 964 people taken out of income tax altogether.
‘The rise in the 40p threshold will also mean fewer people in Boston and Skegness will now pay the 40p rate of tax. That means local people keeping more of the money they’ve worked hard to earn, giving them and their families more financial security for the future.’
Notes to Editors
The personal allowance will rise to £11,000. In 2016-7 the personal allowance will rise to £11,000. This is a tax cut for 27 million people, saving the typical basic rate taxpayer £80. Because of rises in the personal allowance since 2010 the typical taxpayer will be paying £905 less tax than they would have been in 2010/11, with 3.8 million people not paying any income tax at all (HM Treasury, Summer Budget 2015, 8 July 2014).
The personal allowance has already been raised from £6,475 to £10,600. The personal allowance has already risen to £10,600 this year (HM Treasury, Summer Budget 2015, 8 July 2014).
The higher rate threshold will rise from £42,385 to £43,000. In 2016-17, the threshold for the higher rate of income tax will rise from £42,385 to £43,000. This is the first time since 2010 that the higher rate threshold will go up by more than inflation alone. These changes will lift 130,000 individuals out of higher rate tax by 2016-17, compared to 2015-16. A typical higher rate taxpayer will benefit by £142 in 2016-17, and will be £818 better off compared to 2010 (HM Treasury, Summer Budget 2015, 8 July 2014).