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)