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Home › Blog › UK Personal Allowance 2024/25: What It Is and How It Works
UK Personal Allowance 2024/25: What It Is and How It Works
🕑 3 min read · FinCalcHub Editorial
Quick Answer
The UK Personal Allowance for 2024/25 is £12,570. This is the amount you can earn tax-free. Income above £12,570 is taxed at 20% (basic rate), 40% (higher rate above £50,270), or 45% (additional rate above £125,140).
2024/25 UK Income Tax Bands
| Band | Income | Rate |
|---|
| Personal Allowance | Up to £12,570 | 0% |
| Basic rate | £12,571–£50,270 | 20% |
| Higher rate | £50,271–£125,140 | 40% |
| Additional rate | Over £125,140 | 45% |
The £100,000 Trap: Personal Allowance Taper
Once your income exceeds £100,000, you lose £1 of Personal Allowance for every £2 earned above that threshold:
- At £100,000: full £12,570 allowance
- At £112,570: allowance reduced to £6,285
- At £125,140: allowance is completely gone
The 60% effective tax trap: Between £100,000 and £125,140, the effective marginal tax rate is 60% (40% income tax + 40% tax on the lost allowance ÷ 2). Pension contributions are the most effective way to bring income below £100,000.
How to Maximise Your Personal Allowance
- Pension contributions — reduce adjusted net income, potentially restoring lost allowance
- Gift Aid donations — extend basic rate band, effectively increasing allowance value
- Marriage Allowance — if your partner earns below £12,570, they can transfer £1,260 of their allowance to you (saving £252/year in tax)
- Salary sacrifice — employer schemes for childcare vouchers, cycle-to-work, EV cars reduce taxable income
Personal Allowance on Your Tax Code
HMRC communicates your Personal Allowance through your tax code — usually 1257L for the standard allowance. If your tax code is different, check your HMRC Personal Tax Account at gov.uk — you may have unpaid tax from a prior year being collected, or untaxed income from other sources adjusting your code.
Scotland: Different Rates Apply
Scottish taxpayers pay different rates above the Personal Allowance. Scotland has 6 bands (starter rate 19%, basic 20%, intermediate 21%, higher 42%, advanced 45%, top 48%). The Personal Allowance itself (£12,570) is the same across the whole UK.
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