The Chancellor had previously announced his intention to increase personal allowances and the basic rate tax band.
The purpose of this is to increase the threshold at which individuals start to pay higher rate tax.
For the current 2015/2016 tax year the basic rate threshold is set at £42,385 and this will increase to £43,000 from April 2016.
In the Budget, the Chancellor announced that from April 2017 the basic rate threshold will be £45,000.
The £2,000 is a significant increase giving a £400 tax cut to individuals with this amount of taxable income.