The Chancellor of the Exchequer George Osborne said his party were making good on the two commitments over the tax free personal allowance and the 40p rate threshold.
The Conservatives said they would raise the tax free personal allowance to £12,500 – so no one working 30 hours a week on the national minimum wage pays tax.
The party pledged that it would raise the threshold at which people pay the higher 40p rate of tax to £50,000.
{desktop}{/desktop}{mobile}{/mobile}
The tax-free personal allowance will be raised to £11,000 next year, Mr Osborne said, while the higher rate threshold, currently at £42,385, will move to £43,000.
This will lift 130,000 people out of the higher rate of income tax altogether, he said, with 29 million people paying less tax overall as a result of moves announced today.
Mr Osborne said: “These were our priorities at the election – they are the priorities in this Budget.
“For we on this side deliver what we promise. So the rates of income tax in this Budget remain unchanged – but the thresholds do not. Today I am taking the first major step to delivering our promise.
“I am raising the tax-free personal allowance to £11,000 next year.
“That’s £11,000 you can earn before paying any income tax at all – boosting wages by over £900 in total – and a down payment on our goal of reaching £12,500.
“We will now legislate so that after that the personal allowance always rises in line with the minimum wage, and we never ask the lowest paid in our society to pay income tax. The higher rate threshold currently stands at £42,385. I am today raising it to £43,000 from next year.
“It marks a strong start to our commitment to raise the threshold to £50,000.”