Tax & HMRC
⏱ 3 min read
📅 Updated May 2026
Personal Allowance UK 2026-27: How Much Can You Earn Before Paying Tax?
⚡ Personal Allowance UK 2026-27 — Updated April 2026
Personal Allowance: £12,570 | Basic rate (20%): £12,571–£50,270 | Higher rate (40%): £50,271–£125,140 | Additional rate (45%): above £125,140 | Frozen until April 2028 |
The Personal Allowance is the amount of income you can earn each year without paying Income Tax. It applies to employment income, self-employment profits, pension income, and rental income. The allowance is frozen at £12,570 until April 2028. UK Income Tax Rates and Bands 2026-27| Band | Income Range | Tax Rate | Notes |
|---|
| Personal Allowance | £0–£12,570 | 0% | Tax-free for most people | | Basic Rate | £12,571–£50,270 | 20% | Applies to most employees | | Higher Rate | £50,271–£125,140 | 40% | — | | Additional Rate | Above £125,140 | 45% | Personal Allowance is zero at this level | | Personal Allowance taper | £100,000–£125,140 | 60% effective | Allowance reduces by £1 per £2 above £100,000 |
| ⚠️ If your income is between £100,000 and £125,140, your Personal Allowance is reduced by £1 for every £2 above £100,000. At £125,140, it is fully withdrawn — creating an effective 60% marginal tax rate in this band. Pension contributions can reduce your income back below £100,000. |
Personal Allowance Examples UK 2026-27| Annual Income | Tax-Free (PA) | Taxable | Income Tax Due | Effective Tax Rate |
|---|
| £20,000 | £12,570 | £7,430 | £1,486 | 7.4% | | £30,000 | £12,570 | £17,430 | £3,486 | 11.6% | | £50,000 | £12,570 | £37,430 | £7,486 | 15.0% | | £60,000 | £12,570 | £47,430 | £11,432 | 19.1% | | £100,000 | £12,570 | £87,430 | £27,432 | 27.4% | | £125,140 | £0 | £125,140 | £49,464 | 39.5% |
Who Does Not Get the Full Personal Allowance?- Income over £100,000 — Allowance reduces by £1 for every £2 above £100,000. Fully withdrawn at £125,140
- Non-UK residents — May have a different allowance depending on residency status
- Additional rate taxpayers — No personal allowance above £125,140
- Scottish taxpayers — Same Personal Allowance but different rate bands set by the Scottish Parliament
How to Protect Your Personal Allowance- Pension contributions — Reduce your adjusted net income below £100,000 to restore the personal allowance
- Gift Aid donations — Charitable donations via Gift Aid extend your basic rate band
- Salary sacrifice — Employer schemes for pension, cycle to work, or childcare vouchers reduce taxable income
- Marriage Allowance — Transfer £1,260 of your Personal Allowance to a basic-rate taxpayer spouse (saves up to £252/year)
What is the Personal Allowance for 2026-27?The Personal Allowance is £12,570 for 2026-27 — the same as 2025-26. It is frozen at this level until April 2028. You pay no Income Tax on the first £12,570 of income. When does the Personal Allowance reduce?Your Personal Allowance reduces by £1 for every £2 your income exceeds £100,000. At £125,140 it is fully withdrawn. This creates an effective 60% marginal tax rate on income between £100,000 and £125,140. What is the income tax rate in the UK for 2026?20% on income from £12,571 to £50,270 (basic rate), 40% from £50,271 to £125,140 (higher rate), and 45% above £125,140 (additional rate). Scottish taxpayers have different rates set by Holyrood. What is the Marriage Allowance?The Marriage Allowance lets you transfer £1,260 of your unused Personal Allowance to a basic-rate taxpayer spouse or civil partner. This saves the higher earner up to £252/year in Income Tax. Apply free via GOV.UK. Sources: HMRC Income Tax rates — GOV.UK · HMRC Personal Allowance — GOV.UK · Scottish Government income tax rates 2026-27 · Marriage Allowance — GOV.UK |
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The content on Kaeltripton.com is for informational and educational purposes only and does not constitute financial, investment, tax, legal or regulatory advice. Kaeltripton.com is not authorised or regulated by the Financial Conduct Authority (FCA) and is not a financial adviser, mortgage broker, insurance intermediary or investment firm. Nothing on this site should be construed as a personal recommendation. Rates, figures and product details are indicative only, subject to change without notice, and should always be verified directly with the relevant provider, HMRC, the FCA register, the Bank of England, Ofgem or other appropriate authority before any financial decision is made. Past performance is not a reliable indicator of future results. If you require regulated financial advice, please consult a qualified adviser authorised by the FCA.
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Chandraketu Tripathi
Finance Editor · Kaeltripton.com
Chandraketu (CK) Tripathi, founder and lead editor of Kael Tripton. 22 years in finance and marketing across 23 markets. Writes on UK personal finance, tax, mortgages, insurance, energy, and investing. Sources: HMRC, FCA, Ofgem, BoE, ONS.
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