what is the personal tax allowance

The personal tax allowance is the amount of income an individual is allowed to earn each tax year before they start paying income tax. For the tax year 2023/24, the standard personal allowance in the UK is £12,570. If an individual earns less than this amount, they usually wont have to pay any income tax. However, if an individual earns above the threshold, their personal allowance is reduced by £1 for every £2 they earn above it, until it reaches £0. The personal allowance may be bigger if an individual claims Marriage Allowance or Blind Person’s Allowance, or smaller if they are a high earner or owe tax from a previous tax year. The personal allowance is applied differently depending on the type of income an individual receives. For example, if an individual is self-employed, they will take their personal allowance off their profit before working out how much income tax to pay. If an individual is a salaried employee, their employer will apply their personal allowance to their wages when working out how much income tax to deduct from their wages.