Personal Allowance
The amount of income you can earn in a tax year before paying income tax, currently £12,570 and frozen until April 2031 (the freeze was extended by three years at the Autumn Budget 2025). 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.
How it works
The Personal Allowance is built into your tax code — the standard code 1257L represents the £12,570 allowance divided by ten — so your employer's payroll software applies it automatically without you needing to make a claim. It is a UK-wide figure set by the UK government rather than a devolved one, so it stays the same whether you pay tax under the rest-of-UK bands or the Scottish bands.
Because it has been frozen until April 2031, rising wages mean more of your income each year falls into taxable bands even though the tax-free amount itself hasn't moved — an effect commonly called fiscal drag. High earners lose the allowance gradually once adjusted net income passes £100,000, at a rate of £1 for every £2 earned above that level.
Unused Personal Allowance generally cannot be carried forward to a future tax year or refunded in cash. The main exceptions are targeted transfers such as Marriage Allowance, which lets a non-taxpaying partner pass on a portion of their unused allowance to a basic-rate spouse or civil partner.
Example: Personal Allowance in a simple tax calculation
Someone earning £20,000 a year, with no other adjustments, has the first £12,570 of that income completely tax-free.
Their taxable income is £20,000 − £12,570 = £7,430, all within the basic-rate band.
Tax due is £7,430 × 20% = £1,486 for the year.
Frequently asked questions
Is the Personal Allowance the same in Scotland?
Yes, the £12,570 figure is set by the UK government and applies equally to Scottish taxpayers; only the rates and band widths applied above it differ north of the border.
Can I increase my Personal Allowance?
Not directly, but you can effectively access more of it by reducing adjusted net income through pension contributions, or by receiving a transfer via Marriage Allowance or Blind Person's Allowance.
What happens to unused Personal Allowance?
It is generally lost for that tax year rather than carried forward, though Marriage Allowance lets a low-earning partner transfer a fixed portion of it to their spouse or civil partner.
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 £3,250 (2026/27) 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.