Personal Allowance
UK tax glossary · Last reviewed: April 2026
The standard Personal Allowance is £12,570 for 2026/27. It is built into your tax code — code 1257L means £12,570 tax-free income. The allowance has been frozen at £12,570 since April 2021, with no planned increase before April 2028.
The allowance tapers by £1 for every £2 of income above £100,000, disappearing completely at £125,140. High earners may see a 0T or K code as a result. Incomes between £100,000 and £125,140 face an effective 60% marginal tax rate because of this taper.
You can boost your effective allowance through salary sacrifice pension contributions or making Gift Aid donations, both of which reduce adjusted net income for tapering purposes.
Worked example
Income: £110,000. Excess above £100,000: £10,000. Allowance reduction: £10,000 ÷ 2 = £5,000. Remaining allowance: £12,570 − £5,000 = £7,570. That extra £10,000 of income costs £4,000 in income tax (40%) plus £2,000 from the lost allowance — an effective rate of 60%.
Common questions
Does the Personal Allowance apply to all types of income?
Yes, it applies to your total income (employment, pension, rental, savings) unless different rules apply — for example, dividends have a separate allowance.
Can my partner use my unused Personal Allowance?
Not directly, but Marriage Allowance lets the lower earner transfer up to £1,260 of their allowance to their partner, as long as the recipient pays only basic-rate tax.
Related resources
TaxHelper provides general information based on published HMRC rates and guidance. It is not regulated financial or tax advice. For decisions involving significant sums, complex circumstances, or if you are unsure, speak to a qualified accountant or HMRC directly.