Everyone that works in the UK is given a tax allowance, the amount of your tax allowance can depend on your income, age, and circumstances. This article will provide more details on how to find out what your yearly tax allowance is and how you can check you are receiving all the allowances that you are entitled to.
Income Tax Allowances
Your personal allowances is the amount of income that you can earn before you need to start paying any tax. The tax allowance for the 2010/2010 tax year is £6,475 and this was not changed from the previous year. In 2008/2009 the tax allowance was £6,035. In the recent budge the new conservative and Lib Dem coalition announced places to increase the tax allowance by £1000 to £7475 starting from April of 2011.
Older people are given larger tax allowances. If you are between the age of 65 and 74 your tax free allowance for the 2010/2011 tax year is £9,490 and if you are over 75 you are given a slightly higher tax allowance of £9,640. If however the income limit for receiving age-related allowances is £22,900 or more.
Your Tax Code
Your tax code will reflect any allowaces and deductions that have been taken into account when determining your allowance for the year. You can use your tax code to check approximately how much you allowance is by taking the number within the tax code and multiplying it by 10. For example if you tax code is 647L, take the number ‘647’ and multiple this by 10 to give ‘6470’ . This is the amount of your allowance, and you do not need to pay any tax if you earn under this. If you have earned below this amount and have paid tax you can claim it all back.