[tæks əˈlaʊəns]
A Tax Allowance gives someone the opportunity to earn money tax-free below a given threshold. The Personal Allowance is the most common allowance in the UK.
A Tax Allowance enables an individual or business to earn a certain amount of money without having to pay any tax on it. There are a variety of different Tax Allowances in the UK that are applicable to different individuals or businesses.
Most allowances have to be used in the Tax Year they apply to and cannot be Carried Forward to the next one. But, some allowances like the Pension Annual Allowance allow individuals to Carry Forward any unused allowance from the three previous years and add it to the current one.
Other allowances include the Personal Allowance. The standard Personal Allowance is £12,570 for 2023/24 Tax Year but can reduce when an individual earns above £100,000.
There is also the Trading Allowance, Marriage Allowance, Capital Gains Tax Allowance and many more
A Tax Allowance is not the same as a tax relief. A tax relief allows the amount of tax an individual pays to be reduced.
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