Personal Allowance
The amount of income you can earn in a tax year before paying income tax, currently £12,570 and frozen until April 2028. It applies equally to employment income, self-employment profits, and most other income types. Individuals with adjusted net income above £100,000 begin to lose their Personal Allowance at a rate of £1 for every £2 earned above that threshold.
Related Terms
Personal Allowance Taper
The gradual withdrawal of the Personal Allowance for people with adjusted net income above £100,000, reducing it by £1 for every £2 of income above that level.
Marriage Allowance
Allows one partner in a marriage or civil partnership to transfer £1,260 of their unused Personal Allowance to the other, reducing the recipient's tax bill by up to £252 per year.
Blind Person's Allowance
An additional tax-free allowance of £3,070 (2025/26) available to registered blind individuals, added on top of the Personal Allowance to reduce taxable income.
Tax Code
A code issued by HMRC to your employer to tell them how much income tax to deduct from your pay each period.
Basic Rate
The standard income tax rate of 20% applied to taxable income between the Personal Allowance and the higher-rate threshold, currently £12,571 to £50,270 in England, Wales, and Northern Ireland.
Try the calculator
Use our free tool to see how personal allowance affects your tax.