The tax-free personal allowance has been set at £11,000 for 2016-17; it will rise to £11,500 for 2017-18. The Government intends to increase the personal allowance to £12,500 by the end of the current Parliament in 2020.
The personal allowance is set at the same level for taxpayers of all ages, although higher earners have their allowance reduced by £1 for every £2 by which income exceeds £100,000. Individuals with in-come in excess of £122,000 for 2016-17 and £123,000 for 2017 -18 won’t receive a personal allowance. The abatement triggers an effective marginal tax rate of 60% between £100,000 and £122,000 for 2016-17. If you have income in that range, you could consider making pension contributions or Gift Aid donations to reduce your taxable income.
