Personal Allowance in the UK for 2024
The personal allowance in the United Kingdom is the amount of income that is not subject to income tax. For the tax year 2024/2025, the personal allowance remains at the level of £12,570.
What is the Personal Allowance?
The personal allowance is a portion of an individual’s income that is not taxed. This means that if your annual income is equal to or less than £12,570, you do not owe income tax. For income exceeding this threshold, different tax rates apply depending on the amount of income.
Tax Rate Structure for 2024/2025
- Basic Rate: 20% for income between £12,571 and £50,270.
- Higher Rate: 40% for income between £50,271 and £150,000.
- Additional Rate: 45% for income over £150,000.
Additional Reliefs
- Marriage Allowance: This is a relief where one member of a married couple can transfer part of their personal allowance to their spouse if their income is below £12,570.
- Blind Person’s Allowance: Additional relief for individuals with visual impairments.
Changes and Updates
The personal allowance is usually updated annually based on inflation and other economic factors. However, for the period 2021-2026, the personal allowance has been frozen at £12,570 as part of measures to stabilize the national budget.
How to Calculate Your Income Tax
To calculate your income tax, follow these steps:
- Determine your total taxable income: This includes salaries, pensions, rental income, interest from savings, and more.
- Subtract the personal allowance: Deduct £12,570 from your total income.
- Apply the relevant tax rates: Apply the rates of 20%, 40%, and 45% to the respective portions of your income.
Example: If you have an annual income of £60,000:
- Taxable income = £60,000 – £12,570 = £47,430.
- Tax on the first £37,700 (between £12,570 and £50,270) = £37,700 x 20% = £7,540.
- Tax on the remaining £9,730 (between £50,271 and £60,000) = £9,730 x 40% = £3,892.
Total tax = £7,540 + £3,892 = £11,432.
For more information and resources, visit GOV.UK and HMRC.
