There is news circulating about the increase of tax-free personal allowance from £12,570 to £14,064 which could result in a tax rebate of up to £1,242. This increase is being announced for married couples and civil partners, which can earn an increased tax-free threshold of £252.
This allowance can be claimed for up to 4 years backdated. Individuals can also claim other allowances that provide additional tax relief, including blind person allowances, marriage couple allowances, and savings and dividend allowances. The standard rate of tax-free personal allowance is £12,570, which is decreased by £1 on each £2 over the income of £100,000.
HMRC Tax Free Allowance News
The HMRC Tax Free Personal Allowance is a significant aspect of the UK tax system because it allows individuals to earn a certain amount of income each year without paying income tax. The tax-free Personal Allowance from HMRC is being increased to £14,064 for certain people.
This increase will specifically target married couples or those who are in civil partnership. They could face an increased tax-free income by £252, which could potentially result in a tax rebate of up to £1,242. This benefit can be applied for up to four years if individuals want to claim for backdated years. The duration of the current tax year is between 6 April 2024 to 5 April 2025.
When combined with the regular Personal Allowance for the year, the HMRC perk might result in a tax rebate of up to £1,242, making the total tax-free £14,064 rather than £12,570. Your income above your Personal Allowance decides how much you have to pay in taxes each year. Individuals can earn more tax free income if they claim Blind Person’s Allowance.
How will HMRC Tax Free Allowance be beneficial?
The recent news circulating about the increase of £14,064 tax-free Personal Allowance for married couples and civil partners has many benefits such as it could result in a tax rebate of £1,242. The one more primary benefit is that low income couples and civil partners can get more earnings without being subject to income tax.
If the couples and civil partners backdated, then the personal allowance will provide them with a significant rebate amount. This reduces the stress of tax season and makes it easier for them to manage their finances. Overall, this increase is a great initiative towards financial relief, simplifies tax planning and improves financial security for many households.
HMRC Income Tax Rates and Bands
For the tax year 2024-25, the £12,570 is the amount of income on which you are not taxed on but this amount decreases if your income exceeds £100,000. For each £2 earned over £100,000, individuals could lose £1. There will be no personal allowance if your taxable income is more than £125,140.
The tax rates in each band are available in the below table if you are on Standard Personal Allowance is £12,570.
| Band | Taxable Income | Tax Rate |
| Personal Allowance | Up to £12,570 | 0% |
| Basic Rate | £12,571 to £50,270 | 20% |
| Higher Rate | £50,271 to £125,140 | 40% |
| Additional Rate | over £125,140 | 45% |
If you have employment or receive a pension, you can check your income tax to see your tax code, personal allowance, and the amount of tax you paid so far this year. You can also see how much you’ll probably pay for the remaining part of the year.
You may be able to receive income tax reliefs if you qualify such as you might be eligible to claim the Marriage Allowance to reduce your partner’s tax if your income is below the usual Personal Allowance.
Which other allowances provide additional tax relief?
The Blind Person’s Allowance provides additional tax relief to those who are blind or severely sighted impaired. This allowance allows you to save more tax free earnings along with the standard personal allowance. This allowance provides a tax relief amount of £3,070 for the tax year 2024-2025. It means an eligible individual can earn a total tax free income of £15,640.
There are various other tax-free allowances available which include allowances for savings interest, dividend income, and income from self-employment or property rental. For example, the first £1,000 of income from self-employment or rental property is tax-free under the trading and property allowances.