Lib Dems Pledge Increase to Income Tax Allowance

Income Poor, Asset Rich

The Lib Dems have recently announced that they will raise the income tax personal allowance to £12,500 if they are part of the next government.
This is expected to help 26 million UK workers. Low earners that fall beneath the threshold will not have to pay tax at all, while those basic rate taxpayers will experience, on average, a £400 tax cut. The current tax-free personal allowance stands at £10,000 and is set to increase to £10,500 next April. The Lib Dems stated in their manifesto that the £12,500 rise would be implemented by 2020. The Lib Dems then went on to announce that after the allowance rise they will increase the threshold for National Insurance Contributions (NICs) from £7,956 to the same amount, £12,500. Through rising the threshold of both the income tax allowance and national insurance contributions millions of workers will be better off. Danny Alexander, the chief secretary to the Treasury, said: “Our tax system must be fair and help to make being in work pay. That’s why cutting income tax for working people, particularly those on low and middle incomes, is a top Liberal Democrat priority.”