Personal allowance (UK income tax)
The personal allowance reduces taxable income in an individual’s income tax computation, subject to eligibility and statutory adjustments. For UK tax year 2025–26, the standard allowance was £12,570 and was reduced by £1 for each £2 of adjusted net income above £100,000, down to zero. Different years, circumstances and exclusions may change the computation. TX-UK June 2026–June 2027 assesses the Finance Act 2025 period, so use the supplied exam tax tables and specific facts.
Worked example
For 2025–26, assume standard allowance entitlement and adjusted net income of £110,000. The £10,000 excess reduces the allowance by £5,000, leaving £7,570 before other applicable adjustments.
Common mistake
Applying the full standard allowance without checking adjusted net income, or using a threshold from a different tax year.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | TX (UK) | Direct | June 2026–June 2027 |