The Personal Allowance is the slice of income everyone can receive tax-free each tax year. For 2026/27 it is £12,570, unchanged since 2021 because the government has frozen it until at least April 2031. Most tax codes are built from it: the standard code 1257L is simply the allowance with the last digit removed.
Two groups do not get the full amount. If your income is above £100,000 the allowance is withdrawn by £1 for every £2 over, disappearing entirely at £125,140 and creating an effective 60% tax band. And if you transfer part of it to a spouse under the Marriage Allowance, your own allowance shrinks by £1,260. See how it shapes your bill with the Income Tax Calculator.
On a £35,000 salary, the first £12,570 is tax-free and the remaining £22,430 is taxed at 20%, costing £4,486 a year. At £110,000 the taper bites: the allowance falls to £7,570, so the £10,000 earned above £100,000 loses £6,000 to tax, an effective 60% rate before National Insurance.
