Tax-free allowances in the UK

A tax return awaits each of us regardless of which country we live in. In the United Kingdom, too, this obligation will not pass us by. There is a reason the English saying goes “Nothing is certain but death and taxes”. Nevertheless, there are also benefits that come with it - one of them is the tax-free allowance.

The tax year in the UK

Unlike in Poland, where the tax year begins and ends with the calendar year, in the United Kingdom it runs from 6 April to 5 April of the following year. New tax thresholds are announced every year and, with them, a new tax-free allowance is set.

This amount, known in English as the Personal Allowance, is available to most people living in the United Kingdom. What is it? It indicates the income you can earn each year without having to pay tax.

The tax-free allowance - UK

The tax-free allowance you are entitled to can vary depending on a few factors. The most important of these is the level of your total income in the tax year. If, after adding up all your income for a given year (including, for example, pensions, interest on bank accounts, etc.), it does not exceed the set threshold, you can count on being exempt from tax.

It is also worth knowing that the Personal Allowance is reduced by £1 for every £2 of income above £100,000, which means that people with income at or above £125,140 cannot use the allowance.

On the other hand, the amount available under the Personal Allowance can be higher for people who can use the tax relief for married couples (Marriage Allowance) or the tax relief for blind people (Blind Person’s Allowance).

In the past, an additional factor was age or date of birth. In this way, elderly people could earn a higher income without having to pay tax. From the 2016/17 tax year, however, a uniform system was introduced, under which every taxpayer entitled to the allowance receives the standard Personal Allowance rate.

In the current tax year (2023/24) the standard allowance is £12,570. It therefore remains at the same level as last year. Comparing data from previous years, it is easy to notice that the rate at which the UK tax-free allowance grows has slowed considerably compared with the earlier period. What is more, we cannot expect it to be raised further any time soon, because the Personal Allowance has been frozen at £12,570 until the 2027/2028 tax year.

• 2015/2016 - £10,600

• 2016/2017 - £11,000

• 2017/2018 - £11,500

• 2018/2019 - £11,850

• 2019/2020 and 2020/2021 - £12,500

• 2021/2022 and 2022/2023 - £12,570

By comparison, in Poland the tax-free allowance for the 2023 tax year is 30,000 zł, i.e. around £6,000 - considerably less than in the UK.

We will help you file your income tax in the UK

The income tax rates in England in the 2023/2024 tax year are:

0% on income up to £12,570 (Personal Allowance) 20% on income from £12,571 to £50,270 (basic rate) 40% on income from £50,271 to £125,140 (higher rate) 45% on income above £125,140 (additional rate)

Income tax in the 2023/24 tax year

Get in touch with us and we will help you check whether you are entitled to tax relief. We will also help with all the formalities involved in the process. By working with PolAccount, you can be sure you are making full use of the opportunities the British tax system offers.