Chloe Smith MP has welcomed further income tax cuts for hardworking people across Norwich, delivering on the Conservatives’ key election promise to raise the personal allowance.
In the Summer Budget, the Chancellor set out the next steps in his plan to support working people by ensuring they keep more of the money they earn:
A downpayment on a £12,500 Personal Allowance: in 2016-17, the personal tax-free allowance will increase by £400 to £11,000, so that next year a typical rate income taxpayer will be £905 better off compared with 2010. This is part of our commitment to raise the allowance to £12,500 by the end of the parliament.
Delivering on our promise to raise the higher rate threshold: in 2016-17, the threshold for the higher rate of tax will increase from £42,385 to £43,000, saving the typical higher rate taxpayer £142 and lifting 130,000 people out of the rate altogether. This is a first step on our commitment to raise the threshold to £50,000 by the end of the parliament.
The Summer Budget also introduced a new National Living Wage for over 25s to support people who work hard and do the right thing. The new National Living Wage will mean two and a half million people get a direct pay rise. Those currently on the minimum wage will see their pay rise by over a third this Parliament, a cash increase for a full time worker of over £5,000.
‘The new National Living Wage combined with these income tax cuts are excellent news for hardworking people in Norwich, and shows we will deliver what we promised.
‘The rise in the personal allowance will mean lower taxes for around 88,000 working people here in Norwich, with an estimated 1,800 people taken out of income tax altogether.
‘The rise in the 40p threshold will also mean fewer people in Norwich will now pay the 40p rate of tax.
‘That means local people keeping more of the money they’ve worked hard to earn, giving them and their families more financial security for the future.’