Government Changes to Income Tax and Personal 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 2018 increased from £11,500 to £11,850 which 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 2018/2019
Tax Band Taxable Income 2018/2019Tax Rate
Personal Allowance£11,8500%
Basic rate £11,851 to £34,50020%
Higher rate £34,501 to £150,00040%
Additional rate Over £150,00045%

 

Married Couple’s Allowance

If you are married or in a civil partnership 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.

 

Marriage Allowance

If you are married or in a civil partnership and living together then you could be eligible for Marriage Allowance.  The Marriage Allowance allows you to transfer a proportion of your personal allowance (£1,190) to your spouse or civil partner.

 

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 £11,850 or less

  • Your partner’s income is between £11,851 and £46,350 (or £43,430 if you’re in Scotland)