PERSONAL ALLOWANCE is the name given to the amount of taxable income which can be earned before it becomes subject to Income Tax rates.
Currently, the standard Personal Allowance is £12,500. However, it won’t remain this way for much longer as HM Revenue and Customs (HMRC) will be increasing it later this year.
The threshold will rise by inflation, which is formally known as the Consumer Prices Index (CPI).
This year, the rate is 0.5 percent, which is how much the Personal Allowance will therefore rise by on April 6, 2021.
It was announced in the Spending Review, with details published in the Spending Review 2020 policy paper.
Chancellor of the Exchequer Rishi Sunak delivered a Spending Review statement in the House of Commons in November last year.