Move meant to stabilize economy after Brexit
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LONDON (Reuters) — British finance minister Philip Hammond said on Monday that the government will bring forward income tax cuts for tens of millions of workers to help the economy a month after the United Kingdom is due to leave the European Union.
Hammond, delivering his annual budget speech, told parliament the personal allowance — the point at which people start paying income tax — will rise to 12,500 pounds (C$20,999) from April next year, from the current 11,850 pounds ($19,907).
At the same time, Hammond said the government would raise the higher rate income tax threshold to 50,000 pounds ($83,995), from 46,350 pounds ($77,863).
The ruling Conservative Party pledged in its last two manifestos to introduce the tax cuts by 2020, but there had been speculation that they could be delayed or even scrapped to meet a pledge this year to increase spending on healthcare or welfare.
"The hard work of the British people is paying off in hard cash in their pockets," Hammond said. "A tax cut for 32 million people, 130 pounds ($218) in the pocket of a typical basic rate taxpayer."
The United Kingdom is due to leave the EU on March 29.
