Government Changes to Income Tax
and Personal Allowances

Up-to-date information on your tax allowances

We all have a personal allowance that determines how much income tax we will have to pay on our earnings. If you earn above the personal allowance you will be required to pay tax at the applicable rate. The current tax-free Personal Allowance as of 6th April 2020 increased from £11,850 to £12,500 this is the amount you can earn without having to pay any tax. The table below outlines the Personal Allowance tax bands based on income.

Your personal allowance 2020/2021
Tax Band Taxable Income 2020/2021Tax Rate
Personal Allowance Up to £12,5000%
Basic rate £12,501 to £50,00020%
Higher rate £50,001 to £150,00040%
Additional rate Over £150,00045%

For further information please see gov.uk/government/publications/income-tax-personal-allowance

 

Married Couple’s Allowance

If you are married or in a civil partnership and living together and at least one of you were born on or before 6 April 1935 then you could be eligible for Married Couple’s Allowance. The allowance could cut your tax liability. The Marriage Allowance allows you to transfer a proportion of your personal allowance to your spouse or civil partner. The easiest way to check how much you’ll get is to use the calculator on the GOV.uk website. The following factors will determine whether or not you can apply:

/ You are married or in a civil partnership and living together.
/ You don’t earn anything or your income is £12,500 or less.
/ Your partner’s income is between £12,501 and £50,000 (or £43,430 if you’re in Scotland).

For further information please see https://www.gov.uk/marriage-allowance20