The 2020 Autumn Spending Review confirmed the approach to the personal allowance and basic rate for 2021/22. What do you need to know?
Uplift
The government has confirmed that the income tax personal allowance and basic rate threshold will increase using the consumer price index figure to September 2020. Using the rules set out in Income Tax Act 2007 , this should mean that the personal allowance for 2021/22 will be £12,570, and the basic rate band should be £37,700.
Pro advice
This is based on a CPI figure of 0.5%.
The personal allowance and basic rate band will increase by 0.5% for 2020/21, which should give clients £12,570 and £37,700 respectively.
This article has been reproduced by kind permission of Indicator – FL Memo Ltd. For details of their tax-saving products please visit www.indicator-flm.co.uk or call 01233 653500.