Glossary · UK
What is Personal Allowance?
The amount of income you can earn each tax year before paying any income tax.
Full Definition
The Personal Allowance is the amount of income you can earn each tax year before paying any UK Income Tax. For 2026/27 the standard Personal Allowance is £12,570. It applies UK-wide, including Scotland (even though Scotland sets its own tax rates above the allowance). The allowance is reduced by £1 for every £2 of income above £100,000, falling to zero at £125,140 — this creates an effective 60% marginal tax rate in the £100k–£125,140 band. Some people get a higher Personal Allowance (e.g. Blind Person's Allowance, Married Couple's Allowance for those born before 6 April 1935).
How Personal Allowance is calculated
Reduced PA = max(0, 12570 - (Adjusted net income - 100000) / 2)- 12570
- Standard Personal Allowance for 2026/27 (GBP).
- 100000
- Income threshold above which the allowance starts to taper.
- Adjusted net income
- Total taxable income after certain reliefs (e.g. gross pension and Gift Aid).
Worked example: On GBP 120,000 of income the allowance is 12,570 - (120,000 - 100,000) / 2 = 12,570 - 10,000 = GBP 2,570. It reaches zero at GBP 125,140, which is why the 100k-125,140 band carries an effective 60% marginal rate.