Increase In Personal Allowances

Tucked away in a recent issue of  ‘Notes for payroll software developers’ is a  bit more information on the timescale for the increase in the current year’s personal allowance from £5,435 to £6,035 and the reduction in the higher rate point from £36,000 to £34,800. These changes mean that basic rate taxpayers will benefit by £120 per tax year whilst the position of higher rate taxpayers will be unchanged.

The guidance notes state that the change is expected to take place from 7 September 2008, subject to Parliamentary approval and Royal Assent of the Finance Bill.

The guidance goes on to state that a revised employer CD rom will also be issued at around that time to confirm the changes. Those individuals on straightforward PAYE tax codes (suffix L) will have their tax codes uplifted to reflect the change. Individuals with more complicated circumstances will be issued with individual coding notices nearer the time.

Employers and employees need do nothing for the time being. We will keep you informed of developments.

Internet Link: HMRC notes

To find out more about how we can help you, please contact Simon Coles & Co, London Chartered Accountants.