Guide · Tax
UK Personal Allowance Explained 2026/27
The Personal Allowance is the most fundamental concept in UK income tax: it is the amount of income you can earn each tax year before paying a single penny of income tax. For 2026/27 the allowance is £12,570— the same figure it has been since April 2021 and the same it will be until at least April 2028. This guide explains exactly how the allowance works, what happens when your income exceeds £100,000 (the "taper trap"), how Marriage Allowance allows couples to transfer unused allowance, the Blind Person's Allowance, how to read your tax code, and what the long freeze means in real terms for UK workers.
Personal Allowance — key figures 2026/27
- Standard Personal Allowance: £12,570
- PA taper starts: adjusted net income above £100,000
- PA fully withdrawn at: £125,140
- Marriage Allowance transfer: £1,260 (saves £252/yr)
- Blind Person's Allowance: £3,070 (additional)
- Standard tax code: 1257L
- Marriage Allowance recipient code: 1383M
- Freeze until: at least April 2028
What Is the Personal Allowance?
The Personal Allowance is a tax-free amount of income that every UK taxpayer is entitled to receive each tax year (6 April to 5 April) without paying income tax. It is set against your total taxable income — employment, self-employment, pensions, rental income, savings interest — before income tax bands apply.
Income inside an ISA or pension is not counted as taxable income and does not interact with the Personal Allowance at all.
National Insurance contributions (employee Class 1) also start at the same threshold — £12,570/year for 2026/27 — so below this level you pay neither income tax nor National Insurance on employment income.
How Income Tax Bands Work Above the PA
Once your income exceeds the Personal Allowance, income tax bands apply to the excess:
| Income (2026/27) | Rate (England/Wales/NI) |
|---|---|
| Up to £12,570 | 0% (Personal Allowance) |
| £12,571–£50,270 | 20% (Basic Rate) |
| £50,271–£125,140 | 40% (Higher Rate) |
| Above £125,140 | 45% (Additional Rate) |
| £100,001–£125,140 (effective) | ~60% (PA taper zone) |
The Personal Allowance Taper Above £100,000
The Personal Allowance is reduced by £1 for every £2 of "adjusted net income" above £100,000. Adjusted net income is your total income minus certain reliefs (mainly pension contributions and Gift Aid donations).
The allowance is completely withdrawn at £125,140: (£125,140 − £100,000) ÷ 2 = £12,570 = full allowance removed.
In this zone, the effective marginal income tax rate is 60%: you pay 40% on the extra income plus another 40% on the removed Personal Allowance. Including 2% employee NI that still applies above £50,270, the effective rate is 62%.
How to escape the 60% trap:
- Make pension contributions (salary sacrifice or personal) to reduce adjusted net income below £100,000
- Make Gift Aid charitable donations — these also reduce adjusted net income
- Defer bonuses or income if possible to a different tax year
- Ask your employer to pay a bonus as pension contribution rather than cash (employer contribution — no income tax or NI)
Marriage Allowance: Transfer £1,260
Marriage Allowance allows a spouse or civil partner who earns below the Personal Allowance to transfer £1,260 of their unused allowance to their partner, provided the recipient is a basic-rate taxpayer (income between £12,571 and £50,270). The transfer saves the recipient £252 per tax year (20% of £1,260).
The relief can be backdated up to four full tax years. Claims since 2022/23 would currently be within the backdate window, potentially worth over £1,000 total. You apply online at gov.uk — the transferring partner makes the claim and HMRC amends both tax codes.
The tax code for the recipient becomes 1383M (1257 + 126 = 1383). The transferor's code becomes 1131N (1257 − 126 = 1131). "M" stands for Marriage Allowance received; "N" for transferred.
Blind Person's Allowance: £3,070
Individuals who are registered as blind or severely sight-impaired with a local authority in England or Wales (or hold a certificate of visual impairment in Scotland/NI) are entitled to the Blind Person's Allowance of £3,070 in 2026/27. This is in addition to the standard Personal Allowance, giving a combined tax-free income of £15,640.
If one partner in a couple is entitled to the BPA but cannot use it all (for example, their income is below the standard PA), the unused portion can be transferred to the other spouse or civil partner — similar to, but entirely separate from, Marriage Allowance.
Understanding Your Tax Code
Your tax code tells your employer (or pension provider) how much tax to deduct each pay period. The most common codes:
| Tax code | Meaning |
|---|---|
| 1257L | Standard Personal Allowance — most common code |
| 1383M | Marriage Allowance recipient (+£1,260 extra allowance) |
| 1131N | Marriage Allowance transferor (−£1,260 allowance) |
| 0T | No Personal Allowance — all income taxed |
| BR | All income taxed at basic rate (20%) — typically second job |
| D0 | All income at higher rate (40%) — second job in higher band |
| K[number] | Negative allowance — benefits in kind exceed PA |
| NT | No tax to be deducted |
Fiscal Drag: What the Freeze Really Means
The Personal Allowance was £12,570 in April 2021. It will still be £12,570 in April 2028. That is a seven-year freeze — the longest in modern UK tax history.
Over the same period, UK earnings have risen by approximately 20–25% in nominal terms. This means a worker earning £50,000 in 2021 might now earn £60,000 — pushing them firmly into the higher-rate band with no change to the tax rates themselves.
In purchasing-power terms, the £12,570 allowance is worth approximately £10,380 in 2021 money (adjusted for RPI). Every year of freeze represents a real-terms tax increase — workers pay tax on a larger share of their income each year as wages rise but the allowance does not.
This freeze has generated tens of billions of pounds in additional tax revenue for the government without any need to announce a rate increase.