Most people have a Personal Allowance – an annual amount of tax-free income. The rates of Income Tax you pay depend on how much taxable income you have above your allowance.
Personal Allowances:
| Age | Amount |
|---|---|
| Up to and including 64 | £8,105 |
| 65 to 74 | £10,500 |
| 75 and over | £10,660 |
Your Personal Allowance goes down by £1 for every £2 of your income above £25,400 to a minimum Personal Allowance of £8,105 if both the following apply:
- you’re aged 65 and over
- your income is between £25,400 and £100,000
For every £2 your income is above £100,000, your Personal Allowances goes down by £1. This can reduce your Personal Allowance to zero if your income is high enough.
Blind Person’s Allowances: £2,100
Income Tax Rates and Bands:
| Tax rate | 2012 to 2013 tax year | ||
|---|---|---|---|
| Basic rate 20% | £0 to £34,370 | ||
| Higher rate 40% | £34,371 to £150,000 | ||
| Additional rate 50% | Over £150,000 |