UK Income Tax Allowances 2009-10

Personal Allowance

Nearly everyone who lives in the UK is entitled to an Income Tax Personal Allowance. This is the amount of income you can receive in the year without having to pay tax on it.

Levels of Personal Allowance

If you become 65 or 75 during the year (6 April 2009 to 5 April 2010), you are entitled to the allowance for that age group.

Note: If your income is over the income limit, the age-related allowance is reduced by half of the income over and above the limit i.e. £ 1 for every £ 2, until the basic rate allowance is reached. You'll always get the basic allowance, irrespective of the level of your income.

UK Married Couple’s Allowance

Who can claim Married Couple’s Allowance?

1. If married before 5 December 2005

If you are married and living together and at least one spouse was born before 6 April 1935, the husband can claim Married Couple’s Allowance. Your tax bill is reduced by 10 per cent of the Married Couple’s Allowance to which you're entitled. The actual amount depends on the husband's income.

If one of you dies, or if you divorce or separate, you'll get Married Couple’s Allowance for the whole of that tax year.

2. If married on or after 5 December 2005 or are in a civil partnership

If you are married or in a civil partnership and living together and at least one spouse or partner was born before 6 April 1935, the person with the higher income can claim Married Couple’s Allowance.

The claimant's tax bill is reduced by 10 per cent of the Married Couple’s Allowance to which he or she is entitled. The actual amount depends on the income of the spouse or civil partner with the higher income.

The maximum amount of Married Couple’s Allowance is £6,965 and the minimum amount is £2,670 for the 2009-10 tax year. You receive 10 per cent of the allowance amount - which means your tax saving (based on a full year's eligibility) is at least £ 267 and up to £ 696.50. The actual amount depends on the claimant's income. If your income is over £ 22,900 (2009-10 tax year) the Married Couple’s Allowance will be reduced.

The amount of the reduction is worked out as follows:

The allowance will be reduced by half of your income over and above the limit ( £ 22,900 ) i.e. £ 1 for every £ 2 - that's over the limit from your age-related Personal Allowance, until the basic level of Personal Allowance is reached.
The Married Couple’s Allowance is reduced until the minimum amount is reached i.e. you'll always get the minimum Married Couple’s Allowance (10% of £2,670)
if your income doesn't reduce the age-related Personal Allowance to the basic level, the Married Couple’s Allowance is not reduced.

UK Blind Person's Allowance

If you're certified blind and are on a local authority register of blind persons, or if you live in Scotland or Northern Ireland and you are unable to perform any work for which eyesight is essential, you can claim Blind Person's Allowance.

Blind Person's Allowance is added to your tax-free Personal Allowance - so is an extra amount of income you can get each year without paying tax. If you're married or in a civil partnership and can't use all your allowance, you can give the unused part to your spouse or civil partner. Even if you have no taxable income, it might be still worth claiming Blind Person's Allowance as your spouse or civil partner could benefit from your allowance.

Blind Person's Allowance for the tax year 2009-10 is £ 1,890 - there are no age or income restrictions.

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