Personal Allowance
The amount of income a UK taxpayer can earn each year before paying any Income Tax.
The Personal Allowance is the tax-free slice of income at the bottom of the UK Income Tax system — earn less than it, and you owe no Income Tax at all. It tapers away for higher earners: above £100,000, it's reduced by £1 for every £2 of income over that threshold, until it disappears entirely at a higher income level.
Worked Example
With a Personal Allowance of £12,570, someone earning £30,000 only pays Income Tax on £17,430 of it — the first £12,570 is untaxed regardless of earnings, up until the taper begins at £100,000.
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