How much Can I Earn before Paying Tax?

Everyone that works in the UK is given a tax free allowance. This is the amount that you can earn before you need to pay any tax. Your allowance is allocated using your tax code and you then receive this allowance evenly throughout the year within your pay packet. Often if you stop working part way through the tax year you do not receive your tax free allowance and can therefore claim a tax rebate.

Below is a table which shows the current tax free allowance and the allowances for previous years:

Income Tax allowances 2008-09 2009-10 2010-11
Personal Allowance (1) £6,035 £6,475 £6,475
Income limit for Personal Allowance Not applicable Not applicable £100,000
Personal Allowance for people aged 65-74 (1)(2) £9,030 £9,490 £9,490
Personal Allowance for people aged 75 and over (1)(2) £9,180 £9,640 £9,640
Married Couple’s Allowance (born before 6th April 1935 but aged under 75) (2)(3)(4) £6,535 Not applicable Not applicable
Married Couple’s Allowance – aged 75 and over (2)(3) £6,625 £6,965 £6,965
Income limit for age-related allowances £21,800 £22,900 £22,900
Minimum amount of Married Couple’s Allowance £2,540 £2,670 £2,670
Blind Person’s Allowance £1,800 £1,890 £1,890

(1) From the 2010-11 tax year the Personal Allowance reduces where the income is above £100, 000 – by £1 for every £2 of income above the £100,000 limit. This reduction applies irrespective of age.

(2) These allowances reduce where the income is above the income limit – by £1 for every £2 of income above the limit. For the 2008-09 and 2009-10 tax years they will never be less than the basic Personal Allowance or minimum amount of Married Couple’s Allowance. However, from the 2010-11 tax year the Personal Allowance for people aged 65 to 74 and 75 and over can be reduced below the basic Personal Allowance where the income is above £100,000.

(3) Tax relief for the Married Couple’s Allowance is given at the rate of 10 per cent.

(4) In the 2009-10 tax year all Married Couple’s Allowance claimants in this category will become 75 at some point during the year and will therefore be entitled to the higher amount of the allowance – for those aged 75 and over.

67 comments

  1. Ann Pratten says:

    I am 77 years old and have my normal pension plus
    widows pension and a few small ones (About £1000 a month), how much can I earn extra before I have to declare it please.

  2. Seb says:

    Right, last year I worked two jobs, I was getting taxed 20% on one of them however I didn’t earn over £8000 a year (upto April 2013) can I claim the tax I was paying back?

  3. I earn £8000 a year do I have to pay tax says:

    I do earn £8000 a year do I have to pay tax becos just got my p60 and it saids no tax deduction but I have been paying tax every month

    • TaxFix says:

      If you earn £8000 during the tax year and have been paying tax. You can claim it all back. It sounds like there might be a discrepancy between your P60 and your wages though and you should ask your employer to correct it if it is wrong..

  4. j bickerton says:

    ive just retired at 55 and I get a pension of 9,515 a yesr will I have to pay tax on on my penisin

    • TaxFix says:

      j bickerton: Almost all income is taxed. However everyone has a tax free allowance, currently £9,449, so if that is your only income you won’t be taxed very much.

  5. Ricky says:

    Hi im 21 and working full time i earned 3130 pounds last tax year as i was an apprentice before changing jobs, ive been taxed on this amount but its below what i should earn before being taxed, should i be able to claim this back?

    • TaxFix says:

      Ricky: If you earned £3130 during the tax year you will be able to claim back all of the tax that you paid as you earned below the tax free allowance.

  6. g.sims says:

    aged 73 how much can i earn before paying tax

  7. Barry says:

    I am returning to UK as a pensioner; wife still working and will have income of 12480 pa what will be her tax liability? My only income will be pension from Australia and UK.

  8. Andrew Cooper says:

    at what age do I start paying tax

  9. Andrew says:

    How old will I have to be to start paying tax

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