2023: What is the 2022/23 Personal Allowance?​

What is Personal Allowance?

A Personal Allowance is the chunk of your yearly income that doesn’t get hit with Income Tax. It’s worth keeping track of your Personal Allowance, because it can sometimes change and make a difference to the amount of money you bring home in a year. From the first pound you earn over your Personal Allowance limit, you’ll start paying Income Tax. At first, this will cost you 20% of what you make over the allowance threshold, but that rate goes up for people with higher earnings.

The Personal Allowance you qualify for is listed in your job’s tax code, which you’ll find on your payslips. For example, most people in the 2023/24 tax year will have a tax code of 1257L. To work out your Personal Allowance from your tax code, multiply the number at the start by 10. In 2023/24, most people paying Income Tax in the UK have a Personal Allowance of £12,570, and will only be charged tax once their income goes over that.

What is the 2022/23 Personal Allowance rate?

The Personal Allowance for 2023/24 is £12,570, so earnings up to that limit are free of Income Tax. Once you earn enough to pay tax, the amount you pay varies according to the tax brackets you fall into. Here are the main tax rates for 2023/24:

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 £150,000 40%
Additional Rate Over £150,000 45%

Here's what it means in practice:

  • With an income of £20,000, you’ll pay no Income Tax up to £12,570, then the 20% basic rate on everything over that.
  • With earnings of £55,000 a year, you’ll be paying tax on £42,430 after your Personal Allowance. Everything up to £50,270 will be taxed at 20%, when the higher rate of 40% kicks in for the rest.
  • If you make £160,000, on the other hand, there’s a different system in place. Basically, your Personal Allowance “tapers off” by £1 for every £2 you make over £100,000 per year. In practical terms, you’ll have lost your entire Personal Allowance by the time your earnings hit £125,140. That means you’ll pay the basic rate of 20% Income Tax for the first £50,270 of your income, 40% after that until you reach the £125,140 mark, then 45% for the rest.

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How has the Personal Allowance changed since 2022/23?

In the November 2022 Autumn Statement, the Personal Allowance threshold was frozen for an extra 2 years beyond the previous planned date of 2026. This means it hasn’t changed at all since the 2022/23 tax year, and isn’t expected to change again until at least 2028.

What could I be due a tax rebate for?

People end up paying more tax than they should for all sorts of reasons. Here are a few of the big ones:

  • Getting stuck on an Emergency Tax code that doesn’t include your Personal Allowance.
  • Missing out on Marriage Allowance, which lets one spouse donate a chunk of their Personal Allowance to their partner. This can lead to you paying less tax in total when one of you isn’t earning enough to use up their entire tax-free allowance.
  • Getting lumbered with the wrong tax code. For example, HMRC will sometimes alter your code to account for any work expenses you’ve claimed a tax refund for. If your expenses change year-on-year, you can easily end up being charged the wrong amount of tax.
  • People with more than one job can sometimes have their Personal Allowance linked to the wrong one. When that happens, it might lead to you not getting the full benefit of you Personal Allowance.
  • You might be owed a tax rebate when you’re paying from your own pocket for work mileage and the day-to-day essentials of your job.

Talk to RIFT if you think you might be owed some tax back. We’re the UK leading experts in tax refunds, and we take all the stress, effort and guesswork out of claiming back what you’re owed.

FAQsPersonal Allowance FAQs

How do I claim my personal allowance?

Your Personal Allowance is dealt with automatically, whether you work for an employer or are self-employed. The only time you need to kick up a fuss about it is if there’s a problem with it.

I'm self-employed and earn less than my Personal Allowance. Do I still need to report my income to HMRC?

Not necessarily. There’s a “trading allowance” of £1,000 for self-employment income. If you’re making less than that in a year, HMRC won’t expect you to report it to them. However, earning over £1,000 will still mean you have to use the Self Assessment system to report your income, even if you’re not earning enough to pay tax.

I have more than one PAYE job. Do I still get a Personal Allowance?

Yes, but watch out – Personal Allowances are usually only attached to your “main” job. Your other job will be taxed on the whole amount it brings in. If your income from your main job is less than your Personal Allowance, this can mean you’re not getting the full benefit. If neither of your jobs brings in more than your Personal Allowance on its own, you may be able to get your allowance divided between them so you don’t miss out.

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