How Much Can You Earn Without Paying Tax in the UK? (2025-26)
Most UK residents can earn £12,570 in the 2025-26 tax year without paying any income tax. This is the Personal Allowance — a tax-free amount set by the government and applied automatically through PAYE or Self Assessment. However, the real tax-free amount you can have depends on which allowances apply to your situation.
Personal Allowance: £12,570
The standard Personal Allowance for 2025-26 is £12,570. It has been frozen at this level since April 2021 and is set to remain frozen until at least April 2028. For every pound you earn above £12,570, 20% Basic Rate income tax applies (in England, Wales, and Northern Ireland).
Note: the Personal Allowance reduces by £1 for every £2 your income exceeds £100,000, and disappears entirely at £125,140.
Additional tax-free allowances that stack on top
| Allowance | Amount (2025-26) | Who it applies to |
|---|---|---|
| Personal Allowance | £12,570 | Most UK residents |
| Trading Allowance | £1,000 | Self-employment / side hustle income |
| Personal Savings Allowance | £500 (Basic Rate) / £1,000 (year one) | Interest from savings accounts |
| Dividend Allowance | £500 | Dividends from shares |
| Rent-a-Room | £7,500 | Renting a room in your home |
| Marriage Allowance | +£1,260 transferred from partner | Lower-earning spouse / civil partner |
Marriage Allowance: up to £13,830
If you are married or in a civil partnership and your income is below £12,570, you can transfer £1,260 of your unused Personal Allowance to your partner. This raises their effective tax-free amount to £13,830 and saves them up to £252 per year in income tax. You can apply at gov.uk/marriage-allowance.
Trading allowance: first £1,000 from a side hustle
If you earn money from self-employment, selling goods online, or other trading activities, the first £1,000 is completely tax-free under the Trading Allowance. You do not need to declare it or register for Self Assessment. Above £1,000, you must report it.
Rent-a-Room: first £7,500 from lodgers
If you rent out a furnished room in your main home, the first £7,500 of rental income is tax-free under the Rent-a-Room scheme. You do not need to declare it unless your income exceeds this threshold.
Frequently asked questions
Does the Personal Allowance apply to everyone?
Yes, for most UK residents. Non-residents may not be entitled to it, and those earning above £100,000 see it reduced.
Can students earn without paying tax?
Yes. Students have the same Personal Allowance as anyone else: £12,570 in 2025-26. Part-time work or holiday jobs below this threshold are not taxed.
What happens if my employer over-deducts tax?
You will receive a tax refund. HMRC issues P800 letters after the year end, or you can claim via your Personal Tax Account.