How Much Can You Earn Without Paying Taxes 2012?

If you’re looking for an answer to the question ‘how much can you earn without paying taxes in 2012?’ then you’ve come to the right place.  In our guide, we look at the changes to your Personal Allowance in 2012/13.

We also look at changes to other allowances and examine how much tax-free income you’ll be able to earn in 2012/13.  Keep reading to learn more.

Your tax free income in 2012/13

Your Personal Allowance is the amount of income you are allowed to earn each year before you start to pay tax.  The vast majority of taxpayers are eligible for the basic Personal Allowance.  The chart below shows the basic Personal Allowance in the tax year 2011/12, the 2012/13 tax year and the increase between the two years:

Age 2011/12 Change 2012/13
Up to age 65 £7,475 +£630 £8,105
Age 65-74 £9,940 +£560 £10,500
Age 75 and over £10,090 +£570 £10,660

 

This means that if you’re under the age of 65 and you’re eligible for the full Personal Allowance in 2012/13, you can earn £8,105 of income before you’ll start to pay tax.

Other allowances in 2012/13

If you are married and living together, were married before 5 December 2005 and at least one spouse was born before 6 April 1935, the husband can claim Married Couple’s Allowance.

If you are married or in a civil partnership and living together and at least one spouse or partner was born before 6 April 1935, the person with the higher income can claim Married Couple’s Allowance.

HMRC reduce your tax bill by ten per cent of the Married Couple’s Allowance to which you’re entitled. The actual amount depends on the relevant person’s income.

  2011/12 Change 2012/13
Allowance £7,295 +£410 £7,405
Minimum amount £2,800 +£160 £2,960

 

If you’re certified blind and are on a local authority register of blind persons, or if you live in Scotland or Northern Ireland and you are unable to perform any work for which eyesight is essential, you can claim Blind Person’s Allowance.

Blind Person’s Allowance is rising by £120 in 2012/13 from £1,980 to £2,100.

What tax you do pay on the rest of your income

If you earn less than your allowances then you’ll generally pay no tax on your income.  However, if you earn more than your total allowances then you’ll pay tax on your income above this amount at the following levels:

Tax band 2011/12 2012/13
20% – basic rate £0 -£35,000 £0 – £34,370
40% – higher rate £35,001 to £150,000 £34,371 to £150,000
50% – additional rate Over £150,000 Over £150,000

 

You will notice that the point at which you start to pay the higher rate of Income Tax will decrease by £630 to £34,370 in 2012/13.  This is to balance the £630 increase in the personal allowance for people aged under 65.

74 comments

  1. sue says:

    Hi i was wondering if i was to start a job how much can i earn before i pay tax and national insurance??

    • TaxFix says:

      sue: The tax free allowance is currently 9,449 pounds. This will be allocated evenly throughout the tax year though so that you won’t get it all at once.

  2. Dee says:

    I have calculated earnings of £8,640.50 but haven’t calculated costs or expenses lighting gas water etc desks phone internet etc etc does that mean I won’t be liable for Tax payment?

    • TaxFix says:

      Dee: If you earned £8,640, then you will be earning under the tax free allowance and there will be no tax to pay anyway.

  3. Gordy says:

    I Don`t understand why if you work hard and can earn £150,000 a year you have to pay 50% of that in tax leaving you with the wage of £75,000 when you still get the same treatment from the government than those on a minimum wage paying 20% tax..if you worked hard for it some times working 16 hours a day 6 days a week to make ends meet i feel you shouldn`t have to pay so much tax in the long run your killing yourself to line the governments pockets

  4. G Westley says:

    If a person is claiming disability higher rate due to a very bad disability, How much could they earn by selling books?

  5. raymond says:

    how much tax will i pay on £9.500

  6. d dawson says:

    how much tax should i pay on 8000 per anumm

    • TaxFix says:

      d dawson: Nothing, as you’ll have earned below the tax free allowance. If you have paid any income tax you can claim it back.

  7. Simon B says:

    Hi
    I have earned just under £12000 last year (12/13) and paid tax all the way from the first tax week to the last. Am I eligible for a refund?

  8. Trish says:

    I have a normal night job and pay tax on this.
    If I seek to raise approximately £1000 to fund a trip and offer my skills as a decorator to friends to I have to pay tax on this also.

  9. alan atkin says:

    can i claim unemployment bennefit if i did not pay national insurance because i earned less than 120 pounds per week

  10. Cari says:

    I am a landlord, my annual rental income is £4,800 and i do not make any profit after mortgage repayments, insurances and gas safety check are paid out. Do i have to file self assessment tax reports?

  11. peter says:

    i have 2 private pensions they pay me 3844 per annum and 5000 per annum from incapacity am i liable to pay tax

  12. katie wilson smith says:

    I have started my first job four months ago after leaving university. I have been taxed from the word go. My job is commission based and this month was taxed over five hundred pounds. I though I was able to earn around seven thousand pounds before I would be taxed? Is this correct. Thank you for your help.

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