In the Summer Budget following the General Election, the Chancellor of the Exchequer confirmed the tax-free Personal Allowance will go up, a National Living Wage will be introduced, and National Insurance bills will be cut.
The tax-free Personal Allowance – the amount people earn before Income Tax is paid – will increase further from April 2016, to £11,000.
Over the last five years, this Allowance has continuously increased; from £6,475 in 2010, to £10,600 today, and should reach £12,500 by the end of this Parliament.
More than 53,000 people in Crawley are expected to benefit from these changes in 2016, according to estimates from HM Treasury and the Office for National Statistics. Around 1,000 people in our town will be taken out of paying income tax altogether. The Allowance has increased since 2010, and the typical taxpayer will be £905 better off than they would have been in 2010/11. 3.8 million people will not be paying any income tax at all.
For our firms, the Chancellor also announced an increase in the Employment Allowance, to £3,000, from April 2016, which equates to being able to hire four full-time members of staff on the new National Living Wage, and pay no National Insurance at all.
I hope this will see a further fall in the Crawley unemployment rate, currently (at the time of writing) at 1.6%, having fallen by around a quarter in the last year alone.
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