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 | £9,440 |
| 65 to 74 | £10,500 |
| 75 and over | £10,660 |
For every £2 your income is above £100,000, your Personal Allowance goes down by £1. This can reduce your Personal Allowance to zero if your income is high enough.
Blind Person’s Allowances: £2,160
Income Tax Rates and Bands:
| TAX RATE | 2012 TO 2013 TAX YEAR | ||
|---|---|---|---|
| Basic rate 20% | £0 to £32,010 | ||
| Higher rate 40% | £32,010 to £150,000 | ||
| Additional rate 45% | Over £150,000 |