The personal allowance is the amount of money that you can earn in a tax year (in the UK) without having to pay tax on your earnings, or before you start to pay tax on earnings above that level. So how much is the 2020/21 personal allowance?

If your earnings are below the level of the personal allowance then you do not need to pay any tax (and can claim back any tax that has been deducted in error e.g. with an emergency tax code).

If your earnings are above the personal tax allowance then you start paying tax at the lowest rate until you meet the next tax threshold.

The 2020/21 personal allowance is the same as the previous year and amounts to £12,500 for the period from 6th April 2020 to 5th April 2021.

Any taxable earnings that you have in this period (including SEISS payments, furlough payments etc) are included in this figure as well as pensions.

You can find more details of the current level of allowances on the UK tax rates at a glance page.

It is possible to transfer some of your personal allowance to your spouse if you meet certain criteria – you can find out more about that here.

Some people may not have a personal allowance of £12,500 if they have other factors affecting it – for example benefits in kind so it is worth checking your tax code to see if it is at the standard rate of 1250L.