Nearly everyone who lives in the UK is entitled to an Income Tax personal allowance. This is the amount of income you can receive each year without having to pay tax on it. Depending on your circumstances, you may also be able to claim certain other allowances.
The amount of your personal allowance depends on:
Total income means everything you receive from all taxable sources. That means you need to include things like pensions and interest on your savings in a building society before the tax has been taken off.
Personal allowance |
2009-2010 tax year |
Income limit (see note) |
|---|---|---|
| Basic rate | £6,475 | none |
| Age 65-74 | £9,490 | £22,900 |
| Age 75 and over | £9,640 | £22,900 |
If you become 65 or 75 during the year to 5 April 2010, you are entitled to the allowance for that age group.
Note: If your income is over the income limit, HM Revenue & Customs (HMRC) will reduce the age-related allowance by half of the amount - £1 for every £2 - you have over that limit, until the basic rate allowance is reached. You'll always get the basic allowance, whatever the level of your income.
So if, for example, you're 66 and have an income of £23,400 - £500 over the limit - HMRC would reduce your age-related Personal Allowance by £250 to £9,240.
If you already pay tax through your job or pension, or if you complete a Self Assessment tax return, you should receive a Personal Allowance automatically.
If for any reason you are not receiving a Personal Allowance and you think you should be, please contact HMRC and they will check your entitlement with you.
In order to get the age-related Personal Allowance you need to complete form P161 'Pension Enquiry'.
If you want to claim a tax refund because you didn't use your Personal Allowance, or for any other reason, you need to do so no later than 31 January five years after the end of the tax year (5 April) in which you overpaid tax.
For example, a claim for the tax year 2003-04 which ended on 5 April 2004 must be made by 31 January 2010.
You can't claim the personal allowance if you are non-UK domiciled and claim the special 'remittance' basis of tax - whereby you only pay tax on income you bring into the UK. If you think this applies to you, please contact HMRC.
If you're certified blind and are on a local authority register of blind persons, or if you live in Northern Ireland or Scotland - and you are unable to perform any work for which eyesight is essential - you can claim blind person's allowance.
If you're married or in a civil partnership and can't use all your allowance, you can give the unused part to your spouse or civil partner. Even if you have no taxable income, it might be still worth claiming blind person's allowance as your spouse or civil partner could benefit from your allowance.
You need to be a taxpayer to claim this allowance, because it's deducted from your tax bill - but it is possible to transfer the allowance to your spouse or civil partner. You can claim married couple's allowance (MCA) if:
If you pay tax and give money to a UK charity or Community Amateur Sports Club (CASC) using Gift Aid, it's important to let HMRC know as this has the effect of increasing the amount of tax-free income and related tax allowances you can receive.
Money, tax and benefits
