What could the new prime minister mean for your finances?

What could the new prime minister mean for your finances?

The UK has a new Prime Minister, and for most it was a fairly obvious result. After a landslide victory over fellow Tory, Jeremy Hunt, Boris Johnson will officially take over from Theresa May today. Whilst his first priority will of course be securing our exit from Europe, one way or another Boris Johnson also has some interesting views on income tax, the NHS pension crisis and stamp duty.

What could this mean for you?

Income Tax Slashed

Amid the race to become the next PM, BoJo vowed to slash income tax for millions of taxpayers by increasing the threshold at which people have to pay the 40p rate of income tax from £50,000 to £80,000.

Mr Johnson said: “We should be raising thresholds so that we help the huge numbers that have been captured in the higher rate.”

Under the plans, it is estimated that a taxpayer earning £60,000 will see their tax bill fall by £2,000, according to tax experts at Blik Rothenberg.

Currently, people in the higher tax rate band – earning from £50,001 to £150,000 – are taxed by 40 per cent.

However, under Boris Johnson,  we could see the income tax band altered to see those earning up to £80,000 dropped into the basic tax rate of 20 per cent. Under the proposed tax rates, you’ll take home £41,433 instead of the current take home of £40,433 based on earnings of £55,000.

If you are earning upwards of £80,000, you would take £6,500 more home a year under BoJo’s proposed income tax plans.

If these changes take place, we’re likely to see them announced in November when the next budget takes place so watch this space.

It remains to be seen if Boris is the man to “Deliver Brexit, Unite The Country and Defeat Jeremy Corbyn” or indeed any of his proposed plans, Avanti will be bringing you all the budget news and keeping you up to date with legislative changes that could impact on your finances.

Avanti are your one stop shop for business advice, accountancy and tax. Their friendly team based in Brightwell Ipswich are happy to provide you with a no obligation advice meeting to see how they can help move you and your business forward in these unpredictable times.

For more information visit the Avanti website.