What it means is that the amount of income over which higher rate tax will become payable will be reduced by £500 (I think).

Increased personal allowance of £1000 at 20% = £200 tax reduction for basic rate taxpayers.

Higher rate tax payers will pay tax at 40% on taxable income over £36,901 - the current start amount is £37,401 - so up to an additional £200 tax will be paid (37401-36901 = £500 x 40% =£200)