Taxation: Personal Allowance

In the UK, the personal allowance for the 2021/22 tax year is £12,570, which is the amount a person can earn before paying income tax. Additional allowances include marriage allowance and blind person's allowance. A single person earning £25,000 will pay an income tax rate of 20%, resulting in an income tax payment of £2,486.

Personal Allowance

In the UK, the personal allowance for the 2021/22 tax year is £12,570. This amount is the amount of money a person can earn before having to pay income tax. The standard personal allowance varies from country to country and from situation to situation.

In the UK, other allowances are available, such as marriage allowance where a person can transfer £1,260 of their personal allowance to their husband, wife or civil partner, and blind person's allowance which is £2,390 added to their personal tax-free allowance. [11]

A single person, full-time employee who earns £25,000 per year is entitled to the standard personal allowance of £12,570 for the 2021/22 tax year. This means that she can earn up to £12,570 without having to pay any income tax. Any income above this amount is subject to income tax at the applicable rate.

Example

A single person earning £25,000 in the UK will pay an income tax rate of 20%.

With personal allowance of £12,570 calculated at 0%.

(25,000 - Personal Allowance of £12,570) * 0.20 = £2,486

This means they will pay £2,486 in income tax.

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