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 Allowance for 2016/17 = £11,000
Income Tax Bands
| Band | Taxable income | Tax rate |
|---|---|---|
| Personal Allowance | Up to £11,000 | 0% |
| Basic rate | £11,000 to £43,000 | 20% |
| Higher rate | £43,001 to £150,000 | 40% |
| Additional rate | over £150,000 | 45% |
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: £2,290