Queen's Speech reveals tax allowance increase

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The Queen's Speech has presented an opportunity for clarification on UK tax changes

New legislation announced as part of the Queen's Speech to commemorate the opening of the new parliament following this month's general election in the UK has highlighted a positive development for workers across the country.

Chancellor George Osborne has introduced new rules that will see future increases in tax allowance linked to the UK minimum wage, meaning future rises in tax allowance are expected to be higher than levels of inflation.

This is a positive step for both employees and employers alike, as it provides clarity on increases in personal tax allowances for the foreseeable future.

It will ensure workers have more money in their pockets come the end of the month and businesses are able to plan effectively for the future.

The move follows pledges by the chancellor that the minimum wage in the UK will increase to at least £8 per hour by 2020 and while the current UK personal tax allowance stands at £10,600, this, in turn, will rise to at least £12,500.

Ahead of Her Majesty's address, prime minister David Cameron stated: "This is the Queen's Speech for working people from a 'one nation' government that will bring our country together.

"We have a mandate from the British people, a clear manifesto and the instruction to deliver. And we will not waste a single moment in getting on with the task."

He added that creating opportunity for everyone lies at the heart of what this new government is trying to achieve and focusing on take-home pay is one area where growth has been left wanting for many in recent years.

At present, the minimum wage for individuals aged 21 and over in the UK is scheduled to increase by three per cent from its current level of £6.50 to £6.70 per hour from October this year - this increase represents the largest real-terms increase in the last seven years.