In his Autumn Statement delivered last week, Chancellor Philip Hammond announced several major tax benefits that will affect how much of their earnings workers will be allowed to keep from next April.
For example, the planned increases in income tax thresholds will go ahead as planned, with the personal tax allowance for the 2017-18-tax year rising from £11,000 to £11,500.
At the same time, the higher rate 40 per cent income tax threshold will rise to £45,000. Mr Hammond also pledged that the thresholds will rise again to £12,500 and £50,000 respectively by the end of this Parliament.
Meanwhile, depending on a person’s individual tax situation, there are other measures that could help them keep more of their earnings, such as renting out a room in their property or doing ‘odd jobs’.
For example, people with a spare, furnished room to let can earn £7,500 tax-free from a lodger under the Government’s Rent a Room Scheme. However, they must live there too and can only let rooms, not the whole property. As an alternative, they could run their home as a bed and breakfast or a guesthouse and provide services such as meals and cleaning in order to qualify.
Meanwhile, from April next year, individuals will be able to earn £1,000 tax-free income from doing ‘occasional jobs’, such as selling their skills or possessions on platforms such as Facebook, eBay or at car boot sales.
Savers will benefit too, as basic rate taxpayers can receive £1,000 of interest a year tax-free, with higher rate taxpayers able to receive £500 in a tax year. Meanwhile, those whose total income from other sources is less than £16,000 a year could be able to receive up to £5,000 in total tax-free under the Government’s Starting Rate for Savings scheme.
