Personal Allowance
Personal Allowance 2026/27
The UK Personal Allowance is £12,570 for the 2026/27 tax year — the amount of income most people can receive before they start paying Income Tax.
What Is the Personal Allowance?
The Personal Allowance is the amount of income you can normally receive before paying UK Income Tax. For the 2026/27 tax year, the standard Personal Allowance is £12,570.
This means that, in straightforward circumstances, the first £12,570 of your taxable income is covered by your Personal Allowance. However, your allowance can be reduced if your adjusted net income exceeds £100,000 and is completely lost once adjusted net income reaches £125,140.
Personal Allowance at a Glance
| Personal Allowance rule | 2026/27 |
|---|---|
| Standard Personal Allowance | £12,570 |
| Adjusted net income where allowance starts reducing | £100,000 |
| Reduction | £1 for every £2 over £100,000 |
| Adjusted net income where allowance becomes £0 | £125,140 |
| Marriage Allowance transferable amount | £1,260 |
| Blind Person's Allowance | £3,250 |
Important: the Personal Allowance is an Income Tax allowance. It should not be confused with separate allowances for savings, dividends or Capital Gains Tax.
How Does the Personal Allowance Work?
Your Personal Allowance is deducted when working out how much of your income is subject to Income Tax. If you have the full £12,570 allowance, you will generally only start paying Income Tax once your taxable income exceeds that amount.
Example: £40,000 income
If you earn £40,000 and qualify for the full £12,570 Personal Allowance:
The allowance itself is not a payment or tax rebate. Instead, it reduces the amount of your income on which Income Tax is calculated.
Personal Allowance and Income Tax Rates 2026/27
For taxpayers in England, Wales and Northern Ireland, the main Income Tax bands for 2026/27 are:
| Band | Taxable income | Rate |
|---|---|---|
| Personal Allowance | Up to £12,570* | 0% |
| Basic rate | £12,571 – £50,270 | 20% |
| Higher rate | £50,271 – £125,140 | 40% |
| Additional rate | Over £125,140 | 45% |
*The Personal Allowance can be lower where adjusted net income exceeds £100,000. Scotland has different Income Tax bands and rates for non-savings, non-dividend income.
What Happens to Your Personal Allowance Over £100,000?
One of the most important Personal Allowance rules applies to people with adjusted net income above £100,000.
Your Personal Allowance is reduced by £1 for every £2 that your adjusted net income exceeds £100,000.
Example: Personal Allowance at £110,000
If your adjusted net income is £110,000, you are £10,000 above the £100,000 threshold. Your Personal Allowance is therefore reduced by £5,000:
£12,570 − £5,000 = £7,570 Personal Allowance
Why Can the Personal Allowance Create an Effective 60% Tax Rate?
For many taxpayers in England, Wales and Northern Ireland, income between £100,000 and £125,140 can effectively suffer Income Tax at a marginal rate of 60%.
This happens because the income is subject to the 40% higher rate while you are simultaneously losing £1 of tax-free Personal Allowance for every £2 of additional income.
This simplified illustration considers Income Tax and the Personal Allowance taper. Your overall position can differ depending on the nature of your income and circumstances.
What Is Adjusted Net Income?
The £100,000 Personal Allowance test is based on adjusted net income, rather than simply your salary. Broadly, adjusted net income starts with your total taxable income before Personal Allowances and then makes adjustments for certain tax reliefs.
Income potentially included can include:
Certain pension contributions and Gift Aid donations can reduce adjusted net income. This can be particularly important when your income is around the £100,000 threshold.
If your adjusted net income is just above £100,000, qualifying pension contributions or Gift Aid donations may reduce adjusted net income and potentially restore some or all of your Personal Allowance. The exact treatment depends on how the contribution or donation is made.
Who Gets the UK Personal Allowance?
Most UK taxpayers are entitled to a Personal Allowance, although entitlement can depend on residence status and individual circumstances. The standard allowance applies across the UK, including Scotland, although Scottish Income Tax rates and bands differ.
Your Personal Allowance may also be affected by your income level, tax code, benefits or other adjustments made by HMRC.
What Does Tax Code 1257L Mean?
1257L is the standard PAYE tax code used for many employees with the standard £12,570 Personal Allowance.
The numbers broadly represent the tax-free amount available through PAYE, with the final zero removed.
A different tax code does not automatically mean something is wrong. HMRC may adjust your code for benefits, untaxed income, previous underpayments or other circumstances.
What if I have more than one job?
You do not normally receive a separate £12,570 Personal Allowance for every job. Your allowance applies to your overall income and HMRC uses tax codes to determine how it is allocated through PAYE.
This is why a second job may have a tax code such as BR or another code that does not allocate the standard Personal Allowance to that employment.
Can Your Personal Allowance Be Increased or Transferred?
Marriage Allowance
Marriage Allowance can allow an eligible lower-earning spouse or civil partner to transfer £1,260 of their Personal Allowance to their partner.
This can reduce the recipient's Income Tax bill by up to £252 for the tax year, provided the eligibility conditions are met.
Blind Person's Allowance
Eligible taxpayers can claim Blind Person's Allowance in addition to their Personal Allowance.
For 2026/27, Blind Person's Allowance is £3,250.
What Income Uses Your Personal Allowance?
Your Personal Allowance can be set against taxable income from a number of sources. It is not restricted to employment income.
| Income source | Can it affect your Personal Allowance? |
|---|---|
| Employment salary | Yes |
| Self-employed profits | Yes |
| Taxable pension income | Yes |
| Rental/property income | Yes |
| Taxable savings income | Yes |
| Dividend income | Can contribute to total/adjusted net income |
Some types of income also have their own separate tax allowances or tax-free treatment. For example, qualifying ISA income is generally tax-free and does not use your Personal Allowance.
Frequently Asked Questions
What is the Personal Allowance for 2026/27?
The standard UK Personal Allowance for the 2026/27 tax year is £12,570. This is the amount of income you can normally receive before paying Income Tax, although the allowance is reduced where adjusted net income exceeds £100,000.
How much can I earn tax-free in the UK?
For many taxpayers the standard tax-free Personal Allowance is £12,570 in 2026/27. However, your total tax-free income can differ because some types of income have separate allowances or exemptions, while higher earners may have a reduced Personal Allowance.
Do you lose your Personal Allowance over £100,000?
Yes, gradually. Your Personal Allowance is reduced by £1 for every £2 that your adjusted net income exceeds £100,000. It is fully withdrawn once adjusted net income reaches £125,140.
What is the Personal Allowance at £110,000?
Assuming no other relevant adjustments, adjusted net income of £110,000 is £10,000 above the taper threshold. The standard £12,570 allowance is therefore reduced by £5,000, leaving a Personal Allowance of £7,570.
What is the Personal Allowance at £120,000?
Adjusted net income of £120,000 is £20,000 above the £100,000 threshold. The standard allowance is reduced by £10,000, leaving a Personal Allowance of £2,570.
At what income do you lose all your Personal Allowance?
The standard Personal Allowance is fully withdrawn when adjusted net income reaches £125,140.
Does everyone get a £12,570 Personal Allowance?
No. £12,570 is the standard allowance, but your actual Personal Allowance can be lower because of your income level or individual tax circumstances. Eligibility can also depend on residence status.
Is the Personal Allowance the same in Scotland?
The standard UK Personal Allowance is £12,570 for 2026/27, including for Scottish taxpayers. However, Scotland has its own Income Tax rates and bands for non-savings, non-dividend income.
Does pension income use the Personal Allowance?
Taxable pension income can use your Personal Allowance in the same way as other taxable income. Depending on your circumstances, this can include State Pension and income from private or workplace pensions.
Can pension contributions restore my Personal Allowance?
Certain pension contributions can reduce adjusted net income. Where your adjusted net income is above £100,000, this may restore some or all of a Personal Allowance that would otherwise be lost. Pension tax rules and contribution limits should be considered before taking action.
Learn More About UK Income Tax
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Prepared by The Online Accountants, an ACCA-qualified UK accountancy firm. Tax rules depend on individual circumstances and can change.