Personal Allowance and Other Tax Allowances.

Tax allowances can be complicated. So here’s a quick summary of tax allowances which we’ll explain in more detail further on:

• Most people can earn £12,570 a year tax-free. This is called the Personal Allowance.
• Once you earn above this amount, you start paying Income Tax.
• The tax rate you pay depends on where you live in the UK and how much you earn.
• Some people may also qualify for extra tax allowances, which reduce the tax they pay.

The Personal Allowance.

The Personal Allowance is the amount of income you can earn each tax year before paying Income Tax.

For the 2026/27 tax year, the Personal Allowance is £12,570

This means you normally do not pay tax on the first £12,570 of your income.

If your income is high

If your income is over £100,000, your Personal Allowance gradually reduces.

It reduces by £1 for every £2 of income above £100,000, until the allowance is completely removed.

Income Tax Rates

Once your income goes above the Personal Allowance, you pay tax at different rates depending on your total income.

England, Wales and Northern Ireland 2026/27.

Tax band	Income	Tax rate
Personal Allowance	Up to £12,570	0%
Basic rate	£12,571 – £50,270	20%
Higher rate	£50,271 – £125,140	40%
Additional rate	Over £125,140	45%

Scotland

Tax band	Income	Tax rate
Personal Allowance	Up to £12,570	0%
Starter rate	£12,571 – £16,537	19%
Basic rate	£16,538 – £29,526	20%
Intermediate rate	£29,527 – £43,662	21%
Higher rate	£43,663 – £75,000	42%
Advanced rate	£75,001 – £125,140	45%
Top rate	Over £125,140	48%

 

Blind Person’s Allowance.

If you are registered blind or severely sight impaired, you may qualify for an additional tax-free allowance.

For 2026/27, the allowance is: £3,250.

This is added to your Personal Allowance, meaning you can earn more income before paying tax.

Who can claim?

You may qualify if:

• You are registered blind with your local authority (England and Wales), or
• You have a medical certificate confirming severe sight impairment (Scotland or Northern Ireland).

If you do not earn enough to use the full allowance, you may be able to transfer the unused amount to your spouse or civil partner.

Here’s where you can find more information about Blind Person’s Allowance.  

Marriage Allowance.

The Marriage Allowance allows some couples to transfer part of their Personal Allowance to their partner.

You cannot claim this if you receive Married Couple’s Allowance (see below).

You may qualify if:

• You are married or in a civil partnership
• The partner transferring the allowance does not pay Income Tax
• The other partner pays tax at the basic rate

How much can be transferred?

For 2026/27, you can transfer £1,260.

This could reduce your partner’s tax bill by up to £252 per year.

How to claim.

The lower-earning partner must make the claim.

You will need:

• Both partners’ National Insurance numbers
• Some proof of identity (for example bank details or a P60)

You can apply for marriage allowance online or call HMRC on 0300 200 3300.

Married Couple’s Allowance.

The Married Couple’s Allowance applies if:

• You are married or in a civil partnership, and
• One of you was born before 6 April 1935

For 2026/27, the allowance is between £4,530 – £11,700.

This allowance reduces your tax bill by 10% of the allowance amount.

Because the rules can be complicated, you may want to get advice. Find out about the help we offer or how to find a tax adviser.

The government has more information on married couple’s allowance.

Other Small Tax Allowances.

Trading Allowance.

You can earn up to £1,000 per year from small self-employed activities or side jobs before paying tax.

Property Allowance.

You can earn up to £1,000 per year from property income before paying tax.

Savings Allowance.

There are also tax allowances for savings and dividend income.

Dividend Allowance.

Tax year	Allowance
2023/24	£1,000
2024/25	£500
2026/27	£500

Personal Savings Allowance.

Taxpayer type	Allowance
Basic rate taxpayer	£1,000
Higher rate taxpayer	£500
Additional rate taxpayer	£0