Most people living in the UK are entitled to a basic Personal Allowance, but this is reduced for people with incomes over £100,000 a year. You may also be entitled to an age-related allowance, Blind Person’s Allowance and/or Married Couple’s Allowance. This means that some of your income, which would otherwise be taxable, will be tax free.
If you are an employee or a pensioner who is taxed under Pay As You Earn (PAYE), your personal allowances will be spread throughout the year, so that each week or month you will have a certain amount of tax-free income and then pay tax on the remainder.
If you are self-employed or have other taxable income not taxed under PAYE, your personal allowances will be taken into account when your tax bill is calculated after you have sent in your annual tax return or repayment claim.