Tax Allowances

Every person in the UK has some tax allowances that they can use to set off against any tax liabilities they may incur during the financial year.

The rates provided cover single persons tax allowance, gifts, pensioners, married couples and blind persons who get a different tax code.

Table of contents

Income Tax Allowance Overview

The following allowances are in the form of a personal tax code. You can therefore earn the following amounts before tax is deducted if you are on PAYE. Effectively this means the amount you have as tax free income before you are charged on your tax return.

PAYE spreads the amount over a 12 month period to smooth the amount of taxes paid each month rather than paying a lump sum at the end of the financial year.

income tax allowances for allIf you have the standard personal allowance, the tax code is formatted at roughly 10% of the value. A tax free allowance of £6,475 would provide a tax code of 647L. Who knows why it can't simply be the full value rather than a percentage! All people, no matter how old they are, can claim the personal tax allowance.

This includes children, single people, married couples and pensioners.

Just make sure you claim what you are entitled to and check out your tax codes are correct when you receive them in the post as the Inland Revenue has been know to get these codes incorrect.

Tax allowances from 2007 to 2010
Personal Allowance (PA)
PA for people aged 65-74 (1)
PA for people aged 75 and over (1)
Married Couple's aged 75+ (1)(2)
Income limit for age-related allowances
Minimum Married Couple's Allowance
Blind Person's Allowance
Tax allowances from 2011 to 2015
Personal Allowance
PA for people aged 65-74 (1)
PA for people aged 75 and over (1)
Married Couple's aged 75+ (1)(2)
Income limit for age-related allowances
Minimum Married Couple's Allowance
Blind Person's Allowance

Notes to the above tables:

Note 1: These allowances reduce where the income is above the income limit which is currently £100,000. They reduce by £1 for every £2 of income above the limit. However, they will never be less than the basic Personal Allowance or the minimum amount of Married Couple's Allowance unless reduced from P11D and other associated expenses.

Note 2: Tax relief for the Married Couple's allowance is given at the rate of 10 per cent.

Up to date tax allowances can be found on the HMRC website here

Car tax Allowances

The inland revenue has a car tax allowance if you use your private vehicle for driving on business where you can claim a fixed amount back per mile no matter what size of the engine of your vehicle.

From 2002/03
First 10,000 Miles
Each subsequent mile
Cars and vans

From April 6th 2011 the mileage allowance for the first 10,000 mile is increased to 45p.

This is the maximum amount that can be offset against tax, although your company can pay you more or less than the values mentioned above.

Single Persons and Married Persons Tax Allowances

Unfortunately in today's world a single person gets the same tax allowances as a married person (apart from an age related married persons allowance shown in the table above). So whether you are single, married or in a civil partnership we all get the same basic personal allowance.

Other Allowances

There are other tax allowances that you can claim in certain circumstances and these are listed below:

Attendance Allowance: You can get a Attendance Allowance if you're aged 65 or over and need help with personal care because of an illness or disability. There are two rates depending on how the disability affects you. Currently, the higher rate is £81.30 per week and the lower rate £54.45. This allowance is not added to your tax code but you claim it and it's paid directly into your bank account.

Carer's Allowance: You can receive Carer's Allowance if you're aged 16 or over and spend at least 35 hours a week caring for someone and they should also be receiving at least one of the following: Attendance Allowance, Disability Living Allowance or Constant Attendance Allowance. This is paid directly into your bank account at an amount of £61.35.

More information on these allowances can be found here

This data was last updated on 24th September 2014.