The UK personal tax allowance for 2025/26 is £12,570. That is the amount you can earn between 6 April 2025 and 5 April 2026 before any income tax is due. The figure has been frozen at this level since 2021/22, and the 2025 Autumn Budget extended the freeze through to 5 April 2031.1GOV.UK. Income Tax: Maintaining the Personal Allowance and the Basic Rate Limit Earn more than £100,000 and the allowance begins to shrink. By £125,140, it has gone entirely.
What Happens Above the Allowance
The £12,570 acts as a zero-rate slice. Income above it is taxed in bands. For taxpayers in England, Wales, and Northern Ireland, the 2025/26 bands are:
- Personal Allowance up to £12,570: 0%
- Basic rate £12,571 to £50,270: 20%
- Higher rate £50,271 to £125,140: 40%
- Additional rate over £125,140: 45%
These rates cover wages, pensions, rental income, and most other taxable income. Savings interest and dividends are taxed separately.2GOV.UK. Income Tax Rates and Personal Allowances
The basic rate limit of £37,700, which fixes where 40% kicks in, is frozen on the same 2031 schedule as the allowance itself. As wages rise but thresholds stand still, more of each year’s income drifts into taxable and higher-rate territory.
If You Live in Scotland
Scottish taxpayers get the same £12,570 allowance but face six bands rather than three above it:
- Starter rate £12,571 to £15,397: 19%
- Basic rate £15,398 to £27,491: 20%
- Intermediate rate £27,492 to £43,662: 21%
- Higher rate £43,663 to £75,000: 42%
- Advanced rate £75,001 to £125,140: 45%
- Top rate over £125,140: 48%
Scottish rates apply to wages, pensions, and most taxable income, though savings interest and dividends still follow the UK-wide rates. A tax code beginning with “S” confirms HMRC treats you as a Scottish taxpayer.3GOV.UK. Income Tax in Scotland Welsh taxpayers see a “C” prefix, but for 2025/26 the Welsh rates match those in England and Northern Ireland.4GOV.UK. Income Tax in Wales
The £100,000 Taper
Once your adjusted net income passes £100,000, you lose £1 of personal allowance for every £2 you earn above that line.2GOV.UK. Income Tax Rates and Personal Allowances The full £12,570 is gone by £125,140.
The consequence in that band is a marginal rate most people don’t see coming. For every £2 you earn between £100,000 and £125,140, you also lose £1 of tax-free income, so you end up paying tax on £3 for every extra £2 of earnings. The effective rate on income in that window works out at 60%. Earning £100,500 rather than £100,000 hands roughly £300 of that £500 back to HMRC.
Keeping Your Allowance With Pension Contributions
Pension contributions made through salary sacrifice reduce your gross income before the taper is calculated. Personal pension contributions work too: for every £1 you pay in where your provider adds basic-rate relief, HMRC treats £1.25 as deducted from your adjusted net income.5GOV.UK. Personal Allowances: Adjusted Net Income Someone on £110,000 who pays £8,000 into a personal pension effectively strips £10,000 from adjusted net income, landing back at £100,000 with the full allowance intact.
Gift Aid Donations
Gift Aid donations also come off adjusted net income at their gross value. A £5,000 gross donation from someone earning £105,000 pulls them back to £100,000. Report the donations on your Self Assessment return or notify HMRC directly.
Other Allowances That Stack On Top
The £12,570 is not the whole picture. Several smaller allowances sit alongside it and can shelter additional income.
Marriage Allowance
If one spouse or civil partner earns less than £12,570, they can transfer £1,260 of unused allowance to the other, provided the recipient is a basic-rate taxpayer. The transfer is worth up to £252 for the year and can be backdated by up to four years.6GOV.UK. Marriage Allowance: How It Works
Married Couple’s Allowance
A separate, older relief for couples where one partner was born before 6 April 1935.7GOV.UK. Married Couples Allowance: Eligibility It cuts your tax bill directly by between £436 and £1,127 for 2025/26. You cannot claim it alongside Marriage Allowance.8GOV.UK. Married Couples Allowance: What Youll Get
Blind Person’s Allowance
People registered as severely sight impaired (or, in Scotland, unable to do work for which sight is essential) receive an extra £3,130 for 2025/26 on top of the personal allowance, taking the combined tax-free amount to £15,700.9Legislation.gov.uk. The Income Tax (Indexation of Blind Persons Allowance and Married Couples Allowance) Order 2026 Any unused portion can be transferred to a spouse or civil partner.10GOV.UK. Blind Persons Allowance
Personal Savings Allowance
Basic-rate taxpayers can earn £1,000 of interest on non-ISA savings tax-free. Higher-rate taxpayers get £500. Additional-rate taxpayers get nothing.11GOV.UK. Tax on Savings Interest
Dividend Allowance
The first £500 of dividend income in 2025/26 is tax-free. Above that, dividends are taxed at 8.75% (basic rate), 33.75% (higher rate), or 39.35% (additional rate).12GOV.UK. Check if You Have To Pay Tax on Dividends The allowance has fallen sharply, from £2,000 in 2022/23 to £1,000 the following year and then £500 from 2024/25.
Trading and Property Allowances
Two separate £1,000 allowances cover casual side income and small rental receipts. If gross income from either source stays under £1,000, there’s nothing to report. Above £1,000, you can deduct the flat allowance or your actual expenses, whichever leaves you better off.13HM Revenue & Customs. Tax-Free Allowances on Property and Trading Income
Living Abroad
Non-residents are not automatically entitled to the personal allowance. You qualify if you’re a British citizen, a citizen of an EEA country, or you’ve worked for the UK government at any point in the tax year. Some double-taxation agreements also grant it.14GOV.UK. Tax on Your UK Income if You Live Abroad: Personal Allowance Even where you qualify, you must claim it at the end of each tax year using form R43. Skip that step and your UK income is taxed from the first pound.
How the Allowance Reaches You
For employees and pensioners, HMRC builds the allowance into a tax code. The standard 2025/26 code is 1257L: the digits represent £12,570 of tax-free income, and the “L” confirms the standard allowance.15GOV.UK. Tax Codes Codes should update automatically when things change, whether that’s a second job, taxable benefits, or a Marriage Allowance claim. When they don’t, you can check and correct them through your HMRC personal tax account.16GOV.UK. Personal Tax Account: Sign In or Set Up Fixing a wrong code quickly avoids months of overpayment followed by a wait for a refund.
If you’re self-employed, have multiple income sources, or earn over £150,000, the allowance is applied through Self Assessment. Your total allowance comes off combined income before HMRC works out the bill. For 2025/26 income, paper returns are due by 31 October 2026 and online returns by 31 January 2027, with tax also payable by 31 January 2027.17GOV.UK. Self Assessment Tax Returns: Deadlines