The Salary Calculator

The Chancellor gave his pre-election budget earlier today – announcing his plans for forthcoming years. With an election just around the corner, this budget is even more of a sales pitch than usual – most of the changes he announced would only come to pass if the Conservatives were to be in government for the next term.

From a personal taxation point of view, the most significant announcement was arguably the plan for the first £1,000 of interest earned on savings to be tax free, effective April 2016. This will allow almost everyone to pay no taxes on their savings interest (those with high incomes from elsewhere will have this £1,000 limit reduced, possibly to zero), but the amount saved each year for most people is likely to be only a few pounds – and at most £200. There is also a plan to raise the threshold for the higher rate tax (the point at which income tax increases from 20% to 40%) ahead of inflation – an effective tax break for those on good middle-class incomes.

The Salary Calculator has already been updated with the tax rates which take effect from April 2015 so you can see how your pay packet will change next month. You can also compare 2014 and 2015 tax rates side-by-side to see where the differences come in.