WHAT IS A PERSONAL TAX ALLOWANCE?
Much to the disappointment of HMRC, every tax year most UK taxpayers are entitled to a UK personal allowance on their taxable income. To put it simply, most people can receive a certain amount of money before having to pay any income tax. This is what is known as a personal tax allowance.
If you’re struggling to get your head around personal tax allowances, GoSimpleTax is here to explain everything you need to know, simply and easily.
HOW MUCH IS THE STANDARD PERSONAL TAX ALLOWANCE?
The standard personal tax allowance amount is £12,570 for 2024/2025. Any income you earn after that will be taxable. The amount of tax you pay after your personal allowance is dependent on how much you earn during a tax year.
| Band | Taxable income | Tax rate |
|---|---|---|
| Personal Allowance | Up to £12,570 | 0% |
| Basic rate | £12,571 to £50,270 | 20% |
| Higher rate | £50,271 to £125,140 | 40% |
| Additional rate | Over £125,140 | 45% |
If your tax affairs are a little more complex, for example, if you’re married or in a civil partnership and receive a marriage allowance, or for age-related or income-related reasons, then your personal allowance works a little differently. You could also receive tax-free allowances for:
- your first £1,000 of income from self-employment
- your first £1,000 of income from property you rent
To see previous year personal tax allowances, check out our blog.
HOW DO I GET MY PERSONAL ALLOWANCE?
Getting your personal allowance is simple. If you file a Self Assessment tax return, you will automatically receive your tax-free personal allowance.
Is there an easier way to file?
If you need to file a tax return GoSimpleTax is here to make things unbelievably simple. Forget about long-winded form-filling and unwelcome phone calls with HMRC. Simply enter the details of your income and expenses and we’ll create your tax return for you and submit it online directly to HMRC.
Access GoSimpleTax and discover a new free way of filing your return (HMRC approved), know what expenses will help you lower your tax bill and keep all your records online, safe & sound. Ready to file with one click. Start your free trial today!
Blog content is for information purposes and over time may become outdated, although we do strive to keep it current. It's written to help you understand your Tax's and is not to be relied upon as professional accounting, tax and legal advice due to differences in everyone's circumstances. For additional help please contact our support team or HMRC.
10 key things you need to know about MTD for ITSA
04 Dec 2024
Split year treatment: could it reduce your tax bill?
04 Dec 2024
How to report cryptocurrency via Self Assessment
01 Nov 2024
