What Is The Personal Allowance for 2012-13?

The personal allowance, i.e the amount of tax free income that you can earn, for the tax year 2012-13 is £8,105 for a person under the age of 65. This is subject to your earnings not exceeding £100,000 and has been increased from the previous year when the rate was £7,475. The aim is the have a personal allowance of £10,000 for everyone and this is being introduced gradually.

If you are 65 or over then you have a higher personal allowance which for 2012-13 has been set at £10,500. This applies from the tax year when you will be 65 at the end of the year (5th April) so if you are 64 at the beginning of the tax year then you can likely still claim this.

If you are 75 or over then you have an even higher personal allowance that amounts to £10,660. Again, this extra allowance applies for the tax year when you reach age 75.

Earnings above the personal allowance are subject to different rates of tax depending on how much you earn in that tax year. There are 3 levels of tax rate applied for the year 2012: 20%, 40% and 50%.  There is a 10% tax rate that is applied to savings only, also depending on your level of earnings.


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