In the UK tax system, personal allowance is the level above which income tax is levied on an individual's annual income. A person who receives less than his/her personal allowance in taxable income (such as earnings and some benefits) in a given tax year does not pay income tax; otherwise, tax must be paid according to how much is earned above this level.
The personal allowance for the tax year 2007-08 for residents under 65 was £5225, and this was increased to £6035 for the tax year 2008-09.
Certain residents are entitled to a larger personal allowance than this. These include the over 65s (followed by an increased allowance for over 75s) blind people, and married couples where at least one person in a marriage or civil partnership was born before 6 April 1935.
The Chancellor announced in May 2008 that the 2008-09 personal allowance would be increased by £600 from £5435 to £6035.
On 22 June 2010, The Chancellor (George Osborne) upped the Personal... Read More