What is a tax allowance?
A tax allowance is an amount you can earn, gain, or spend without paying tax on it. Allowances apply to different income types (earnings, savings, dividends, capital gains) and you can usually use several at once. Most reset every 6 April and cannot be carried forward, so using them before the year ends matters.
Browse all 33 allowances
Select an allowance for a detailed explanation, worked examples and the figures for 2026/27.
Income and rate thresholds
- Personal Allowance 2026/27
The £12,570 Tax-Free Amount
- The Personal Allowance Taper
The 60% Trap Over £100k
- Income Tax Rates & Thresholds
Understand the income tax rates and thresholds 2026/27 for the 2026/27 tax year.
- Higher Rate Tax Threshold 2026/27
When 40% Starts
- Additional Rate Tax 2026/27
The 45% £125,140 Band
- Scottish Income Tax Bands
Understand the scottish income tax bands 2026/27 for the 2026/27 tax year.
- Welsh Rates of Income Tax
Understand the welsh income tax rates 2026/27 for the 2026/27 tax year.
- Marriage Allowance 2026/27
Transfer £1,260 to Your Partner
- Married Couple's Allowance vs Marriage Allowance
Who Qualifies
- Gift Aid Tax Relief
How Higher-Rate Taxpayers Claim
- Cycle to Work Scheme
Tax Savings & How It Works
Savings, ISAs and investments
- Personal Savings Allowance 2026/27
£1,000 Tax-Free Interest
- Starting Rate for Savings
£5,000 0% Band Explained
- ISA Allowance 2026/27
£20,000 Tax-Free Savings Limit
- Capital Gains Tax Allowance 2026/27
£3,000 Exempt Amount
- Private Residence Relief
CGT-Free Home Sales Explained
Pensions
- Pension Annual Allowance 2026/27
£60,000 Limit Explained
- Tapered Annual Allowance 2026/27
High Earner Pension Limits
- Pension Carry Forward 2026/27
Use Unused Allowance From 3 Years
Self-employment and business
- Small Profits Threshold
Understand the small profits threshold for the 2026/27 tax year.
- Class 2 National Insurance
What Sole Traders Pay
- Class 4 National Insurance
Rates for the Self-Employed
- Capital Allowances
Claim Tax Relief on Equipment
- Annual Investment Allowance 2026/27
£1m 100% Relief
- Writing Down Allowance
18% & 6% Pool Rates Explained
- Working From Home Allowance
£6/Week Backdated Claims & Actual Costs
- Use of Home as Office
Flat Rate vs Actual Costs (2026/27)
- VAT Registration Threshold 2026/27
£90,000 Explained
- Flat Rate VAT Scheme
Rates & Who Should Use It
- Employment Allowance 2026/27
£10,500 NIC Relief
- Trivial Benefits Exemption
The £50 Tax-Free Rule
- Property Allowance 2026/27
£1,000 Tax-Free Rental Income
- Rent a Room Relief
£7,500 Tax-Free Lodger Income (2026/27)
How to make the most of your allowances
Identify which allowances apply
List your income sources: employment, self-employment, savings, dividends, property, and capital gains. Each type has its own allowance you can use in parallel.
Use them before 5 April
Most allowances reset at the start of the new tax year and cannot be carried forward. ISAs, the CGT exempt amount, and pension contributions are common use-it-or-lose-it allowances.
Track expenses automatically
For sole traders, capital allowances and home-working relief depend on accurate records. Import your bank statement into TapTax and qualifying expenses are categorised for you.
Frequently asked questions
What is a tax allowance?
A tax allowance is an amount of income, gains, or spending that you can receive or claim without paying tax on it. Common examples include the £12,570 Personal Allowance, the £20,000 ISA allowance, and the £3,000 Capital Gains Tax annual exempt amount for 2026/27.
How many tax-free allowances can I use at once?
You can use multiple allowances simultaneously because they apply to different types of income or spending. For example, you can claim your Personal Allowance on earnings, your Personal Savings Allowance on interest, your dividend allowance on dividends, and your ISA allowance on tax-free savings, all in the same tax year.
Do tax allowances reset every year?
Most allowances reset at the start of each tax year on 6 April and cannot be carried forward if unused. The main exception is the pension annual allowance, where you can carry forward unused allowance from the previous three tax years.
Which allowances are most valuable for sole traders?
Sole traders benefit most from the Personal Allowance, the £1,000 trading allowance, capital allowances (including the Annual Investment Allowance and Writing Down Allowance), the working from home allowance, and pension contributions. TapTax automatically tracks expenses so you claim everything you are entitled to.
How do I know which allowances apply to me?
It depends on your income sources: employment, self-employment, savings, dividends, property, or capital gains. Browse the allowances above by category, or import your bank statement into TapTax to have qualifying expenses and reliefs identified automatically.
Claim every allowance you are owed.
TapTax imports your bank statements, categorises expenses automatically, and submits quarterly updates to HMRC. Free plan, no card required.
Get started free- Tax calculators
Every free calculator, grouped by the job it does.
Where these figures come from
Rates from GOV.UK.