It was announced in 2013 Budget that the personal allowance will be increased by £560 to £10,000 from April 2014. As a result, by April 2014 a typical basic rate taxpayer will pay £705 less income tax per year in cash terms than they would have in 2010-11.
The coalition is expected to have a May 2015 election pledge to increase this allowance to £12,500 and so further rises may still appear next year.
Transferable tax allowance for married couples
Married couples and civil partners will be able to transfer £1,000 of their income tax personal allowance to their spouse. This will be effective from 2015-16 and will be available to couples where neither spouse is a higher or additional rate taxpayer. Savings will be worth up to £200 p.a . We are still unsure of the logistics of this measure, especially around self-assessment tax returns but we are hopeful that it will be dealt with via Pay As You Earn codings.
In April 2014 State Pension Rates will increase by £2.95 per week for the full basic State Pension.
There will also be an option for current pensioners and those who reach State Pension age before the introduction of the new single tier pension, to top up their Additional State Pension record through a new class of voluntary National Insurance contributions called Class 3A voluntary contributions. The scheme will be introduced in October 2015 and will be time limited. Details of the scheme will be set out closer to the time of implementation.
The government will increase the ISA, Junior ISA and Child Trust Fund annual subscription limits to £11,880. The Junior ISA and Child Trust Fund limits will both be increased to £3,840.
Social investment tax relief
The government will introduce a new tax relief to encourage individuals to invest in social enterprises. The new relief will be available from April 2014 and organisations which are charities, community interest companies or community benefit societies will be eligible. Further detail will be published by the government in a roadmap for social investment in January 2014.