UK PAYE Income Tax Allowances

Income tax allowances Year 2013 to 2014 Year 2014 to 2015
Personal allowance for people born after April 1948 (1) £9440 £10,000
Personal allowance for people born between 6 April 1938 and 5 April 1948 (1) (2) £10,500 £10,500
Personal Allowance for people before 6 April 1938 (1) (2) £10,660 £10,660
Income limit for Personal allowance £100,000 £100,000
Income limit for the allowances for those born before 6 April 1948 £26,100 £27,000
Maximum amount of Married Couple's Allowance (born before 6th April 1935) (2) (3) £7915 £8165
Minimum amount of married couple's allowance £3040 £3140
Blind person's allowance £2160 £2230

  1. The Personal Allowance reduces where the income is above £100,000 - by £1 for every £2 of income above the £100,000 limit. This reduction applies irrespective of age or date of birth.

  2. These allowances reduce where the income is above the income limit by £1 for every £2 of income above the limit. This applies until the level of the personal allowance for those aged under 65, or from 2013-14, for those born after 5 April 1948, is reached. For married couples allowance this applies until it reaches the minimum amount

  3. Tax relief for the Married Couple's Allowance is given at the rate of 10 per cent.



UK PAYE Income Tax Bands and Rates

Income tax
rate for the year
Starting Rate
20%
Basic Rate
40%
Higher Rate
45%
2014 - 2015 From £0 to £31,865 From £31,866 to £150,000 Over £150,000

Income tax
rate for the year
Starting Rate
20%
Basic Rate
40%
Higher Rate
45%
2013 - 2014 From £0 to £32,010 From £32,011 to £150,000 Over £150,000




A Guide To Tax Codes

What are tax codes?
Tax codes are usually made up of one letter and several numbers, for example: 522L or K497

If your tax code is a number followed by a letter
If you multiply the number in your tax code by 10, you'll get the total amount of income you can earn in a year before paying any tax,

The letter shows how the number should be adjusted following any changes to allowances announced by the Chancellor, common tax code letters are explained below
Common tax code letters and what they mean
Code Reason for use
L for those eligible for the basic personal allowance
P for persons aged 65 to 74 and eligible for the full personal allowance
V for persons aged 65 to 74, eligible for the full personal allowance and the full married couple's allowance (for those born before 6 April 1935 and aged under 75) and estimated to be liable at the basic rate of tax
Y for persons aged 75 or over and eligible for the full personal allowance
T if there are any other items HM Revenue & Customs (HMRC) needs to review in your tax code
K when your total allowances are less than your total 'deductions'

Other tax codes
If your tax code has two letters but no number, or is the letter 'D' followed by a zero, it
normally indicates that you have two or more sources of income and that all of your allowances have been applied to the tax code and income from your main job.

Code Reason for use
BR Is used when all your income is taxed at the basic rate of 20% (currently 20%) BR tax code is most commonly used for a second job)
DO Is used when all your income is taxed at the higher rate of tax (currently 40%) DO tax code is most commonly used for a second job)
NT Is used when no tax is to be taken from your income or pension



National Minimum Wage Rates


There are currently three different national minimum wage rates and an apprentice
rate, which are usually updated in October each year. The per hour rates that
apply from 1 October 2013 are as follows:

Rate Age
£6.31 for workers aged 21 years or more
£5.03 for workers aged 18 to 20 inclusive
£3.72 for workers aged under 18 (but above compulsory school age)
£2.68 for apprentices aged under 19
£2.68 for apprentices aged 19 and over, but in the first year of their apprenticeship

Apprentices aged 19 or over who have completed at least one year of their apprenticeship are entitled to receive the full national minimum wage rate
applicable to their age.
Visitor Number 538723
Last updated: 20-09-2017