Guide

What is the Personal Tax Allowance?

December 15, 2022
This guide was last updated on:
January 11, 2023

All UK taxpayers are entitled to the personal allowance and it is currently £12,500.

Basically, you don’t pay tax on the first £12,500 you earn – simple as that!

The allowance, however, can be increased or decreased under certain circumstances:

  • If your earnings exceed £100,000 you lose £1 for every £2 over £100,000
  • This can be mitigated by paying into a private pension scheme or donating to charity
  • It can be increased by transferring 10% of the allowance of your low-earning spouse
  • It can be increased by claiming for the Blind Person’s Allowance (£2,450)

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