There are a number of tax-free allowances in the UK and taking advantage of them can significantly increase your tax refund or reduce your tax bill.
Some of these allowances are applied automatically (meaning you won’t need to do anything to benefit form them), while others you’ll need to claim.
You can click on each of these links to see how each works:
1. General tax-free allowances
Tax-free allowance | How much is it? | Do you need to apply for it? |
The Personal Allowance | £12,570 | No |
The Marriage Allowance | £1,260 | Yes |
Blind Person’s Allowance | £2,520 | Yes |
2. Self-employment allowances
Tax-free allowance | How much is it? | Do you need to apply for it? |
The Trading Allowance | £1,000 | No, if you don’t earn more or Yes if you don’t claim other expenses |
The Home Office Allowance | Between £10 – £26 per month | Only if you prefer it to claiming rent |
The Mileage Allowance | Between 24p to 45p per mile | Only if you prefer it to claiming fuel, etc. |
3. Property-related allowances
Tax-free allowance | How much is it? | Do you need to claim it? |
The Property Income Allowance | £1,000 | Only if you don’t earn more or don’t claim expenses |
The Rent a Room Scheme | £7,500 | Only if you’re eligible |
The Private Residence Relief | You don’t pay CGT when selling your home | Only if you didn’t live in it for the entire duration |
4. Investment allowances
Tax-free allowance | How much is it? | Do you need to claim it? |
The Capital Gains Allowance | £12,300 | No |
The Dividend Allowance | £2,000 | No |
The Savings Interest Allowance | Between £5,000 and £0 (depends on your Income Tax band) | No |
5. Other tax-free allowances:
The State Benefits Allowance: some (not all) state benefits are tax-free.
The National Lottery Allowance: winnings from the National Lottery are tax-free.