Millions of people will pay less in tax as a result of the rise in the tax-free limit and higher-rate tax bracket announced in today's Budget.
As expected, the Government is to raise the "personal allowance" to £11,850 in the 2018-19 tax year - up from £11,500 currently.
At the same time, the higher-rate, 40pc, tax threshold is to increase to £46,350 from £45,000.
The move is part of the Conservatives' previously-announced plan to raise the personal allowance to £12,000 and higher-rate to £50,000 by April 2020.
A basic-rate, 20pc, taxpayer will save £70 as a result, while a higher-rate payer will save £340 a year.
The Government said the gradual increase in both allowances since 2010-11 means a typical taxpayer will pay £1,075 less in tax per year than when the coalition government came in.
In the 2010-11 tax year, the personal allowance was £6,475 and higher-rate threshold £43,875.
There will be no changes to the 45pc top rate of tax, which will still apply to earnings above £150,000. Likewise, the "tapered" reduction of the personal allowance on earnings between £100,000 and £123,000 remains in place.
Under these rules the tax-free amount drops by £1 for every £2 above £100,000. Those earning over £123,000 do not have a personal allowance at all.
Want to know how much tax you will pay under the new allowances and rules applying from April 2018? Use our income tax calculator, updated to reflect the latest changes.
As Telegraph Money has previously highlighted, the Tories have increasingly shifted the tax burden onto higher earners.
The uppermost 1pc of earners now contribute almost 30pc of tax. The average-to-lower earners contribute a dwindling portion.