HMRC has issued the latest PAYE tax codes for the tax year 2019-20. The changes will come into effect on April 6 and will see the tax-free personal allowance on income increase to £12,500. Income Tax payers, employers and pension providers will all be affected.
What is personal allowance?
Personal allowance in the amount of money you can earn in a year before you start paying income tax.
What is the increase?
This measure increases the Personal Allowance to £12,500 for 2019 to 2020.
The basic rate limit will be increased to £37,500 for 2019 to 2020.
As a result, the higher rate threshold will be £50,000 in 2019 to 2020.
From 2021 to 2022 onwards, the Personal Allowance and basic rate limit will be indexed with the Consumer Price Index (CPI).
Changes to the basic rate limit, and higher rate threshold, will apply to non-savings, non-dividend income in England, Wales and Northern Ireland.
They will also apply to savings and dividend income in the UK.
How can I check my income tax?
There are plenty of online tools to help you check your income tax.
You can use this handy income tax calculator HERE to see how much tax you’ll be paying.
How can I check my tax code?
It looks like an innocuous set of digits, but your tax code has a critical impact on your finances.
Every year millions of people are hit by errors, and some are due thousands back.
If you haven’t already, check yours using the tax code calculator HERE.