The personal allowance is the amount that you can earn each year before you are subject to tax. It has remained pretty static in the last few years but is the personal allowance increasing in 2023?

The current rate of the personal allowance for the tax year 2022/23 is £12,570 per person. This was set at £12,500 in 2019/20 and has only been increased by £70 since then (in 2021/22).

For 2023/24 the rate of the personal allowance is not set to increase and will remain at £12,570 (barring any changes by the current government). It is also set to stay at this rate until 2026 (again subject to any change by the government).

The main change for 2023/24 is the reduction in the basic rate of income tax by 1p in the pound, from 20% to 19%. There is also a removal of the highest rate of tax of 45%, meaning that the highest rate of tax will be 40%.

The figure at which you start entering the higher tax rate bracket also will remain unchanged at £50,270. So anything you earn above this is taxed at 40%. Anything you earn between £12,571 and £50,270 will be charged at 19%.

Once your earnings get over £100,000 though, you lose the personal allowance at the rate of £1 for every £2 earned. So once your earnings hit £125,140, you will not be entitled to any personal allowance at all.

You can check out the current tax allowances here.