The 2018 Budget and you

Budget - 650 X 300The Chancellor, Philip Hammond delivered his latest budget in October. Here's what it may mean for you.

An increase in the tax free Personal Allowance.
The personal allowance – the amount you can earn without paying any income tax – will be raised from £11,850 to £12,500. This means that a basic rate taxpayer will pay £1,205 less tax in 2019-20 than in 2010-11.

An increase in income tax relief for higher wage earners.
The threshold at which people start paying the higher rate tax will increase from £46,350 to £50,000. This means that in 2019-20, there will be nearly 1 million fewer higher rate taxpayers than in 2015-16.

More money for Universal Credit.
£1 billion has been set aside to top-up payments for those transferring to universal credit from other benefits. Work allowances – what people can earn before their Universal Credit is reduced – will be increased by £1,000/year.

More money for the National Living Wage.
This will rise from £7.83 an hour to £8.21 an hour.

More money for the NHS.
An extra 20.5bn has been committed for the NHS over the next five years.

Additional money for schools.
An extra £400 million will mean £10,000 more for the average primary school and £50,000 more for the average secondary school.

More money for social care.
Local authorities in England will receive a further £650 million in social care funding next year.

More money for road improvements.
Local authorities in England will be given £420 million to fix potholes on roads and renew bridges and tunnels. Much needed after a very cold winter and a very hot summer.

Tax on large digital firms.
To help raise revenue, the Chancellor announced a 2% tax on revenues on larger tech companies, such as Google, Facebook and eBay.

No increase on the annual ISA allowance.
The annual ISA allowance will remain at £20,000 in 2019/20. If you’d be interested in how Al Rayan Bank can help you make the most of your ISA Allowance, you can find out more here.

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