Tax Free Allowances 2023

This article reviews your tax free allowances for 2023

Tax Free Allowance: Understanding Tax Calculations


Probably one of the most confusing aspects of completing tax forms, is understanding what you are entitled to claim legitimately as a 'tax free' allowance or relief. It is worth taking a few minutes extra to check your incomings and outgoings, to ensure that you are not paying more tax than is necessary. Of course, if you have a good accountant or use a good umbrella company, they should point you in the right direction. Remember though, regardless of who completes the work, it is your responsibility to ensure that you are paying the right amount of tax, at the right time.

Set out below is a brief explanation of various allowances that may apply to you.

Personal Allowance

Most people who reside in the UK are entitled to an 'Income Tax Personal Allowance', which is the total annual amount of 'tax free' money you can receive (earnings, pensions, assets, etc). The allowance is based on both age and income. If you pay tax via employment or your pension, or complete a Self-Assessment tax return, you will receive your Personal Allowance automatically. If you are not receiving it or think it's wrong, you should contact HM Revenue & Customs (HMRC). Note: You cannot claim this allowance if you are a non-UK resident, claiming the special 'remittance' basis of tax i.e. you only pay tax on income you bring into the UK.

You can find a list of specific allowances, tax rates and thresholds for personal allowances in the 2023 Income Tax Rates and Personal Allowances tax tables