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Income Tax Rates For 2019-20

With the new tax year nearly here and in the interests of you being able to plan ahead, I thought I would list the changes to income tax this coming year.

Personal allowances will increase from £11,850 currently to £12,500. This is the amount you can earn each year before you pay income tax.

Income tax at the basic rate of 20% will be charged on £37,500 of your taxable income (ie after the personal allowance has been considered). The threshold has changed from from this current tax year which is £34,500.

The threshold for income tax charged at the higher rate increases from £46,350 to £50,000 and is taxed at 40%.

In terms of the forecast economic impact this is expected to benefit 30.6 million people of whom 26.2 million are basic rate tax payers.

The Additional income tax rate of 45% remains the same.

The HMRC policy paper “Income Tax: Personal Allowance and basic rate limit for 2019-20″is here.