Personal Allowance UK 2025-26: £12,570 Tax-Free

What is the personal allowance?

The personal allowance is the amount of income you can earn in a tax year before paying any income tax. For 2025-26, it's £12,570.

If you earn £30,000, you pay income tax on £17,430 (£30,000 - £12,570). The first £12,570 is tax-free.

Most people get the standard personal allowance automatically via PAYE (Pay As You Earn). Your employer deducts tax only on the amount above £12,570.

Personal allowance history (2021-2026)

The personal allowance has been frozen at £12,570 since the 2021-22 tax year:

Tax year	Personal allowance
2025-26	£12,570
2024-25	£12,570
2023-24	£12,570
2022-23	£12,570
2021-22	£12,570
2020-21	£12,500

The freeze is a "stealth tax." As wages and inflation rise but the allowance stays flat, more of your income becomes taxable. This is called fiscal drag. The freeze is legislated until April 2028.

How does PAYE use the personal allowance?

If you're employed, your personal allowance is applied via your tax code. The most common tax code is 1257L:

• 1257: Your personal allowance is £12,570 (the code drops the last digit, so 1257 = £12,570)
• L: You get the standard personal allowance

Your employer uses this code to calculate how much tax-free pay you get each month:

• Monthly tax-free amount: £12,570 ÷ 12 = £1,047.50
• Weekly tax-free amount: £12,570 ÷ 52 = £241.73

Example: You earn £2,500/month. Your employer deducts tax on £1,452.50 (£2,500 - £1,047.50). At 20%, that's £290.50 tax per month.

If you have multiple jobs, your personal allowance is usually applied to your main job only. Your second job uses a BR (basic rate) or D0 (higher rate) code with no allowance.

Personal allowance taper for high earners

If your income exceeds £100,000, your personal allowance reduces by £1 for every £2 you earn over £100,000.

At £125,140, your personal allowance is zero. You pay tax on every pound you earn.

Example: You earn £110,000.

• Excess over £100,000: £10,000
• Personal allowance reduction: £10,000 ÷ 2 = £5,000
• Remaining personal allowance: £12,570 - £5,000 = £7,570
• Taxable income: £110,000 - £7,570 = £102,430

This creates an effective 60% tax rate between £100,000 and £125,140:

• 40% higher-rate income tax
• Plus 20% tax on the lost personal allowance (£1 allowance = 20p tax saved; losing £1 allowance = losing 20p)
• = 60% marginal rate

Many people use pension contributions or salary sacrifice to keep income just below £100,000 and avoid this trap.

Marriage Allowance

If you're married or in a civil partnership, and one of you earns less than the personal allowance, you can transfer £1,260 of your unused allowance to your partner.

Conditions:

• The person transferring must earn less than £12,570
• The person receiving must be a basic-rate taxpayer (income between £12,571 and £50,270)
• Neither can be a higher-rate or additional-rate taxpayer

Saving: The receiving partner saves 20% of £1,260 = £252 per year.

You apply for Marriage Allowance via your personal tax account on gov.uk. The allowance is backdated up to 4 years if you were eligible but didn't claim.

Who doesn't get the full personal allowance?

You get a reduced or zero personal allowance if:

• Your income exceeds £100,000: Allowance tapers as described above.
• You're non-UK resident: Non-residents may get a reduced allowance or none, depending on nationality and UK ties.
• You claim the Blind Person's Allowance: You get an additional £3,070 on top of the personal allowance (total £15,640).

Most UK residents with income under £100,000 get the full £12,570.

How to check your personal allowance

Check your tax code on your payslip, P60, or via your HMRC personal tax account:

1. Go to gov.uk/personal-tax-account
2. Sign in with your Government Gateway account
3. View "Check your Income Tax" → "Tax code"

If your tax code is wrong (e.g., your employer is deducting too much or too little), HMRC will correct it automatically at the end of the year, or you can contact them to update it mid-year.

What if I have no income?

If you have no income (or income below £12,570), you don't use your personal allowance. You can't "save it up" for future years. Each tax year resets.

However, you can transfer part of it to your spouse via Marriage Allowance if eligible (see above).

Self-employed and personal allowance

Self-employed individuals get the same personal allowance as employees. You claim it when filing your Self Assessment tax return.

Your taxable profit (income minus expenses) is reduced by £12,570 before calculating income tax. The personal allowance applies to your total income from all sources (employment + self-employment + interest + dividends).