The standard amount of tax-free income you can have in a year is called your personal allowance. There are other factors such as your income level or age that mean that your personal allowance may reduce, or you could be entitled to additional allowances or ‘tax reducers. We will see how this works by looking at the allowances individually:
- The Personal Allowance
- Blind Person’s Allowance
- Married Couple’s Allowance
- The Marriage Allowance
Allowance table last updated 2024/25
| Allowances | 2022/23 | 2023/24 | 2024/25 |
| Personal Allowance | 12,570 | 12,570 | 12,570 |
| Income limit for personal allowance* | 100,000 | 100,000 | 100,000 |
| Married Couple’s Allowance (MCA)** | |||
| Maximum amount | 9,415 | 10,375 | 11,080 |
| Minimum amount | 3,640 | 4,010 | 4,280 |
| Income limit for Married Couple’s Allowance for those born before 6 April 1935 | 31,400 | 34,600 | 37,000 |
| Blind Person’s Allowance | 2,600 | 2,870 | 3,070 |
| Marriage Allowance *** | 1,260 | 1,260 | 1,260 |
| Trading Allowance | 1,000 | 1,000 | 1,000 |
| Property Allowance | 1,000 | 1,000 | 1,000 |
*The personal allowance reduces where the individual’s income in the tax year is above the income limit by £1 for every £2 above the limit until the personal allowance is removed completely.
**Married Couple’s Allowance may apply if one of the couple was born before 6 April 1935, relief is given at 10% meaning that your tax bill is reduced by 10% of the total allowance, but not below zero.
***The allowance is the transferable part of the personal allowance which applies to transfers between spouses or civil partners both born after 6 April 1935. It can be transferred where neither the transferer nor the transferee is liable for income tax above the basic rate
Savings Allowances last updated 2024/25
| Savings Allowance | 2022/23 | 2023/24 | 2024/25 |
| Dividend Allowance | £2,000 | £1,000 | £500 |
| Personal Savings Allowance | |||
| Basic rate taxpayer | £1,000 | £1,000 | £1,000 |
| Higher rate tax payer | £500 | £500 | £500 |
| Additional rate taxpayer | £0 | £0 | £0 |
The Personal Allowance
Each tax year there is a basic amount of income that is tax-free. The amount of this ‘personal allowance’ is set for each tax year. For the tax year 2024-25 the basic personal allowance is £12,570 (the same as 2023-24).
People with income above £100,000 will have their personal allowance reduced – if their income is high enough, they will not get a personal allowance at all.
Blind Person’s Allowance
A person who is registered blind with a local authority in England and Wales is entitled to an additional amount of tax-free income. In Scotland or Northern Ireland you will qualify for the allowance if your eyesight is such that you are unable to perform any work where your eyesight is essential. In both cases, you will require a certificate or similar document from your doctor.
The allowance is £3,070 for 2024-25. This allowance is given in addition to the usual personal allowance or age allowance. A blind person who has not got enough income to use this allowance can transfer it, or part of it, to his or her husband or wife, or civil partner.
There are more details about the allowance on the HM Revenue and Customs website pages at https://www.gov.uk/blind-persons-allowance
Married Couple’s Allowance
To qualify for the Married Couple’s Allowance at least one member of the couple must have been born before 6 April 1935. This allowance applies to civil partners as well as married couples. There are a number of elections relating to the married couple’s allowance and their impact on PAYE codings is complex.
Please refer to the charity Tax Help for Older People for advice on the Married Couple’s Allowance. You can call them on 01308 488066.
Further information can also be found on the HMRC website page at https://www.gov.uk/married-couples-allowance
The Marriage Allowance
From 6 April 2015 it is possible for some couples to transfer 10% of the personal allowance between them. This is called the ‘Marriage Allowance’. It is completely different from the Married Couple’s Allowance, however, please note that you cannot claim both.
Conditions
The conditions are:
- You do not pay income tax, e.g. because your income is below your personal allowance
- Your partner pays income tax at the basic rate (20%) in England, Wales or Northern Ireland or at the starter, basic or intermediate rates in Scotland (19%, 20% or 21%)
The amount you can transfer in 2024-25 is £1,260. That is 10% of the personal allowance of £12,570 (rounded up). The maximum tax saving is £252 in the year to 5 April 2023 (this is 20% x £1,260).
Making a claim
The partner with the lower income should make the claim.
You will need some information to prove your identity to HMRC. So make sure you have the details to hand:
- the last 4 digits of the account that your child benefit, tax credits or pension is paid into
- the last 4 digits of an account that pays you interest
- details from your year end pay and tax summary form (P60). Your employer should have given you this form for the year to 5 April before 31 May.
You will also need both your own and your partner’s National Insurance numbers.
Go to https://www.gov.uk/marriage-allowance to make your claim.
If you are unable to make a claim on-line, you may phone HMRC on 0300 200 3300 and ask to make a Marriage Allowance claim. You will need the information listed above.
What happens next?
If your partner has income taxed under PAYE, such as an employment or pension, then their PAYE tax code will be increased by the amount of the available Marriage Allowance. This will mean that they pay slightly less tax.
More information
There is information on the Marriage Allowance on the Gov.uk website at https://www.gov.uk/marriage-allowance-guide.
