The UK Personal Allowance for the 2026/27 tax year is £12,570. It is the amount of income you can receive each tax year before paying income tax. It shrinks by £1 for every £2 of adjusted net income above £100,000 and disappears completely at £125,140. There is no increase coming: the law now fixes the allowance at £12,570 up to and including 2030/31.
What the Personal Allowance is
The allowance is set by section 35 of the Income Tax Act 2007. An individual who claims it and meets the residence requirements is entitled to an allowance of £12,570 for the tax year. The tax year runs from 6 April to 5 April, so 2026/27 covers 6 April 2026 to 5 April 2027.
It is a single allowance per person per year, whatever the number of income sources. Employees get it through their tax code: 1257L is the code for most people with one job or pension, and the 1257 is the allowance with the last digit removed. The allowance is applied the same way across the whole UK, although Scotland sets its own rates and bands above it.
HMRC uses "personal allowance" and "tax-free allowance" for the same thing. It is separate from the other tax-free amounts that sit on top of it:
- Personal Savings Allowance. £1,000 of savings interest for a basic rate taxpayer, £500 for a higher rate taxpayer and nothing for an additional rate taxpayer;
- Starting rate for savings. Up to £5,000 of interest at 0%, available in full if your other taxable income is no more than the £12,570 Personal Allowance, reduced £1 for £1 above it and gone once that income reaches £17,570;
- Dividend allowance. £500 for 2026/27;
- Trading and property allowances. The first £1,000 of self-employment income and the first £1,000 of property income.
The £100,000 taper and the 60% band
Section 35(2) reduces the allowance by one-half of the amount by which adjusted net income exceeds £100,000. On £110,000 the allowance falls by £5,000 to £7,570. At £125,140 the reduction equals the whole £12,570, so the allowance is nil.
Between £100,000 and £125,140 each extra £1 of income is taxed at 40% and also removes 50p of allowance, which is then taxed at 40% too. As an illustration rather than an HMRC figure, that is an effective marginal rate of 60% on income in that band. National Insurance comes on top for earnings.
The test uses adjusted net income, not salary. Section 58 of ITA 2007 starts with net income and then deducts:
- Gift Aid donations. The grossed-up amount of the gift;
- Relief at source pension contributions. The gross amount of the contribution, before basic rate relief is added.
That is why a personal pension contribution or a Gift Aid donation can restore lost allowance. Salary sacrifice works too, because it reduces taxable pay before net income is calculated. Note that adjusted net income is not the same as the "adjusted income" used for the pension annual allowance taper; our guide to adjusted income sets out the difference.
Is the Personal Allowance going up?
No. Finance Act 2021 froze the allowance at its 2021/22 level of £12,570, and the basic rate limit at £37,700, for 2022/23 to 2025/26, and Finance Act 2023 extended that to 2027/28. Budget 2025 extended it again, and section 10 of Finance Act 2026 now fixes both figures for 2028/29, 2029/30 and 2030/31. The higher rate threshold therefore stays at £50,270 until 5 April 2031.
The National Insurance primary threshold and the Class 4 lower profits limit are aligned with the Personal Allowance, so they stay at £12,570 for the same period. HMRC's policy paper estimates the extended freeze will bring 700,000 more people into income tax by 2030/31, compared with indexing the thresholds from 2028/29. After 2030/31 the law reverts to its default of CPI indexation, unless Parliament changes it again.
One change does affect how the allowance is used. From 6 April 2027, reliefs and allowances will be set against property, savings and dividend income only after they have been set against other income. This goes with the new property and savings rates for 2027/28, and matters most to people with mixed income.
Transferring allowance: Marriage Allowance
Marriage Allowance lets a spouse or civil partner transfer £1,260 of their Personal Allowance to the other. That is 10% of the standard allowance, set by section 55B of ITA 2007. It can reduce the recipient's tax by up to £252 a year.
The conditions are narrow. The person transferring must normally have income below their Personal Allowance. The recipient must pay tax at no more than the basic rate, which usually means income of £12,571 to £50,270. For a Scottish taxpayer the recipient must pay the starter, basic or intermediate rate, usually income of £12,571 to £43,662. Couples where one partner was born before 6 April 1935 may do better with Married Couple's Allowance, worth up to £11,700 in 2026/27.
Blind Person's Allowance and other adjustments
Blind Person's Allowance adds £3,250 for 2026/27, up from £3,130 in 2025/26, to the Personal Allowance of someone who qualifies and claims it. Unlike the main allowance, it has continued to rise each year.
Your own allowance can also differ from £12,570 because of tax code adjustments rather than law. Taxable benefits, untaxed income, unpaid tax from earlier years and the High Income Child Benefit Charge are all collected by reducing the allowance in your code. A code below 1257L is not a cut to your entitlement. It is HMRC collecting tax through PAYE. If the deductions exceed the allowance, you get a K code.
Using the allowance well
For most people the allowance looks after itself. Planning matters in three cases:
- Income between £100,000 and £125,140. Pension contributions, salary sacrifice or Gift Aid can bring adjusted net income back under £100,000;
- Two jobs or a job and a pension. The allowance usually goes to the highest-paying source, and the rest is often coded BR. See our guide to the BR tax code;
- Couples with uneven income. Marriage Allowance, and holding savings in the lower earner's name, use allowances that would otherwise be wasted.
The full 2026/27 rate table is in our guide to UK tax brackets, and HMRC's current figures are on its income tax rates and Personal Allowances page.
If your income is close to £100,000, or you have several income sources and want to check the allowance is being used efficiently, Acumon's private client tax team can model the position, and our income tax return service makes sure the claim is right on the return.