Introduction to tax allowances and reliefs

There are a number of 'tax-free' and 'tax-deductible' allowances and reliefs you might be able to get to reduce your tax bill - and in some cases mean you've no tax to pay. These include the Personal Allowance, Married Couple's Allowance and some business expenses.

On this page:

Personal Allowance
Blind Person's Allowance
Married Couple's Allowance (includes civil partnerships)
Maintenance Payments relief
Other allowances, reliefs and expenses
Tax relief on pension contributions
Tax relief on gifts to charity

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 each year without having to pay tax on it.

The amount of your Personal Allowance depends on:

your age on 5 April
your total income (if you are 65 or over)

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 are unable to perform any work for which eyesight is essential, you can claim Blind Person's Allowance. Like your Personal Allowance, this is an amount of income you can get without having to pay tax on it.

Read about Blind Person's Allowance

Married Couple's Allowance (includes civil partnerships)

If you're married or in a civil partnership, you or your partner may get Married Couple's Allowance (MCA) if:

you're living together
you or your spouse/civil partner were born before 6 April 1935

There are special rules about who claims MCA. The amount you'll receive depends on the level of the claimant's income. Your tax bill will be reduced by ten per cent of the amount of MCA you can claim.

Read about the Married Couple's Allowance

Maintenance Payments relief

You can get an allowance to reduce your tax bill for maintenance payments you make to your ex spouse or former civil partner if:

you or your spouse or civil partner were born before 6 April 1935
you're separated or divorced or the civil partnership has been dissolved and you're making the payments under a Court Order
the payments are for the maintenance of your ex spouse or former civil partner - provided they aren't now remarried or in a new civil partnership - or for your children who are under 21

Read full details about Maintenance Payments relief

Other allowances, reliefs and expenses

You can get tax relief for different expenses, depending on whether you're an employee or director or self-employed.

Employees and directors

If you're an employee or a director you can get tax relief for business expenses you've paid for and if they were for the cost of:

travelling you had to do in doing your job
other expenses you had to meet in doing your job - and which related only to doing your job

The sort of expenses you might be able to get relief for include:

travel and subsistence
work tools or special clothing
fees and subscriptions to professional bodies
expenses of home working
capital expenditure

Review details of the allowances and reliefs that employees can get

Self-employed

If you're self-employed you can get tax relief for all the business expenses you pay that are just for your business. If you pay for something you use for business and privately - like your phone - and the bill can be split, you can get relief for the bit that's just for your business.

Your business expenses might include:

buying stock or materials and paying subcontractors
business premises costs
repairs and renewals
motor and travelling
advertising
legal and professional fees
general office costs

See details of allowances and reliefs the self-employed can get

Tax relief on pension contributions

The government encourages you to save for your retirement by giving you tax relief on pension contributions. The way you get tax relief on pension contributions depends on whether you pay into a personal, public service or company pension scheme.

Company or public service pension schemes

Usually your employer takes the pension contributions from your pay before deducting tax - but not National Insurance contributions. You only pay tax on what's left. However some employers may choose to use the same method of paying contributions that personal pension scheme providers use - see below.

Personal pensions

You pay Income Tax on your earnings before any pension contribution, but the pension provider claims back tax from the government at the basic rate of 20 per cent. This means that for every £80 you pay into your pension, you end up with £100 in your pension pot. If you're a higher rate taxpayer, you can claim the difference through your Self Assessment tax return making a claim to us by telephone or letter.

Find out about relief on pension contributions

Tax relief on gifts to charity

You can get tax relief if you make gifts to charity. You can do this in a number of different ways.

Gift Aid

Gift Aid offers a simple way to increase the value of your donation to UK charities and Community Amateur Sports Clubs (CASC). It allows the charity or CASC you support to reclaim basic rate tax (20 per cent) on your donation. If you pay tax at the higher rate you can also claim tax relief of 20 per cent (the difference between 40 per cent higher rate tax and 20 per cent basic rate tax) on donations you make to charity through Gift Aid.

Find out about Gift Aid

Payroll Giving

If your employer offers the Payroll Giving scheme, you can use it to get tax relief automatically - at your highest income tax rate - on any donations you make to charity direct from your wages or pension pay packet.

Read about Payroll Giving

Giving assets to charity

If you give certain assets to a UK charity you can claim tax relief and lower your tax bill. You can also claim tax relief if you sell the asset to a UK charity at less than its market value.

Find out about giving or selling assets to charity