Personal Allowance Increase

The personal allowance – the amount you can earn before paying income tax – will rise with the start of the new tax year from £11,000 to £11,500.

The threshold for paying higher-rate, 40pc, tax will also rise from £43,000 currently, up to £45,000.

But you begin to lose your personal allowance once you start earning over £100,000. It is steadily reduced according to your earnings above that threshold, reducing to zero for those earning £123,000 or more.

Britain's Chancellor of the Exchequer Philip Hammond leaves 11 Downing Street, London

The level at which high earners start to pay additional-rate, 45pc tax, remains unchanged, at income over £150,000.

More than 400,000 people will be taken out of tax entirely as a result of the changes, the Government estimates. The average higher and additional-rate payer will also see real‑term gains, but 1.6 million will have an average loss of £23.

In addition, the band on which National Insurance is levied is changing. From April the 12pc charge will be deducted once you earn £157 a week, a £2 rise on last year.

But the upper limit is also increasing from £827 to £866 a week, which means higher earners will pay the 12pc rate on a greater chunk of their salary.

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