Much to the disappointment of HMRC, most UK taxpayers are entitled to a personal allowance. This is money you’re allowed to earn each year which is free from taxation charges. If you’re struggling to get your head around personal allowances, SimpleTax is here to explain everything you need to know, simply and easily.
What is your personal allowance?
Up to a certain point, everything you earn is not taxable. Yes, you heard us right, for once, everything you earn is just that, yours. But how much can you earn before the taxman comes knocking on your door?
Your personal allowance is dependent on your total annual income
The Personal Allowance (any age) for
2016/17 is £11,000
2017/18 is £11,500
The Income Limit for basic Personal allowance in both years stated above is £100,000. Which means your personal allowance goes down by £1 for every £2 that your adjusted net income is above £100,000. This means if you earn £123,000 or above your personal allowance will be 0
You will also need to submit a Self Assessment each year that your income is above £100,000
How do you get it?
If your only form of income is through Employment Income, your Personal Allowance will most likely have been included in you monthly income through PAYE
For any other forms of income or income over £100,000 be sure to complete you Tax Return online before 31 January
Getting your personal allowance is simple. If you file a self-assessment tax return, you will automatically receive your personal allowance.
If you need to file a tax return, SimpleTax is here to make things unbelievably simple. Forget about long-winded form-filling and unwelcome phone calls with HMRC. Simply enter the details of your income and expenses and we’ll create your tax return for you and submit it online directly to HMRC.
Other Keywords: liability; deducted; deduction; non taxable earnings