Budget makes every single taxpayer at least £70 richer - but the best off get FIVE TIMES as much - The Mirror

Every taxpayer has just got a little bit better off, unless they're already better off, then they've got quite a bit better off

Every year, for the past few years, fewer people have paid tax.

Except, for once, this isn't the case of multi-millionaires squirrelling money away in the Caribbean, it's because of the tax threshold.

That's the point when you start paying tax - and since the Coalition came to power in 2010 it's risen from £6,475 to £11,500.

And on April 1 it's going up again - rising another £350 to £11,850.

That means you can make up to £11,850 without being liable for income tax, and anyone earning more than the threshold saves at least £70 a year.

“Squeezed UK households will welcome the fact that the government has increased the personal allowance to £11,850," said Maike Currie, investment director for Personal Investing at Fidelity International.

She calculated a typical basic rate taxpayer will pay £1,075 less tax in 2018-19 compared to 2010-11.

But the real winners are the better off - with the higher rate threshold - where you start paying 40% tax - rising to £46,350 a year. That saves people earning more than that £270 - on top of the £70 everyone else gets.

“Increasing the higher rate tax threshold to £46,350 means more people should pay less income tax from next April. Some will move out of the higher rate tax bracket and become basic rate tax payers," said Kate Smith, Head of Pensions at Aegon.

The Scots pay more

Another quirk, is that this means rich people pay less tax in England than Scotland.

“Scottish and the rest of the UK higher rate income tax bands continue to diverge, as the Scottish band is currently £43,000, and unlikely to catch up any time soon," Smith said.

"This means that some people resident in Scotland and the rest of the UK, but earning the same amount, will not only pay different levels of income tax, but also benefit from different pension tax relief on their contributions."