What is the Personal Allowance for the tax year 2024-25?

The tax free Personal Allowance for the tax year 2024-25 is set at £12,570 and used from April 6.

Tax year 2024-2025 starts on 6 April 2024 and ends on April 5 2025.

With a 2024 personal allowance of £12,570, you are not required to pay income tax on earnings up to this threshold.

Any income exceeding the 2024 tax free allowance will be subject to income tax rates based on your level of income under PAYE (Pay as you Earn) or from self employment.

The 2024 tax free allowance remains the same as the 2023/2024 tax year and the government currently anticipates keeping it unchanged until April 2028.

The accuracy of your 2024 tax free personal allowance is important because it’s used to generate your 2024-2025 tax code and work out how much income tax you will be held liable to pay to HMRC over the course of the tax year.

What are the tax brackets for 2024?

The income tax bands (brackets) and tax rates for the 2024/25 tax year will remain the same as the preceding tax year and are currently projected to remain in effect until 2028.

Once you surpass the 2024 tax free amount of £12,570 the following income tax rates apply from April 6 April 2024:

  • A basic rate of 20% on earnings between £12,571 and £50,270.
  • A higher rate of 40% on earnings between £50,271 and £125,139.
  • An additional rate of 45% on earnings exceeding £125,140.

In Scotland, there may be variations in income tax bands.

Scotland implements different tax rates and bands. For the tax year 2024/25 the Scottish tax rates and bands are as follows:

  • The Starter Rate of 19% applies to income between £12,571 and £14,876.
  • The Basic Rate of 20% applies to income between £14,877 and £26,561.
  • The Intermediate Rate of 21% applies to income between £26,562 and £43,662.
  • The Higher Rate of 42% applies to income between £43,663 and £75,000.
  • The Advanced Rate of 45% applies to income from £75,001 over £125,140.
  • The Top Rate of 48% for income of £125,141 and above.

It’s important to note that the 2024 tax bands and tax rates may be subject to change based on the government’s stance on taxation, which has been unpredictable in recent times.

40% tax bracket 2024

The 2024 40% tax bracket is an important one for many because it marks the threshold when taxpayers start paying the higher rate of tax.

Forty percent tax is payable on any taxable income from April 6 over the 2024 40% tax threshold which is set at £50,271.

The 2024 40% higher rate of tax is paid on income from £50,271 up to income of £125,139 at which point the additional rate of tax begins at a tax rate of 45%.

2024/25 tax year tax code

Your tax code corresponds to the 2024 tax free personal allowance you are given and plays a crucial role as it informs your income source of the appropriate personal allowance and the amount of income tax to be deducted.

The standard code is for 24/25 tax year is 1257L because the 2024 tax free allowance is worth £12,570.

It’s essential to ensure that your tax code is correct because any inaccuracies can result in underpayment or overpayment of income tax.

To determine your tax code for the 2024/2025 tax year you should check your personal tax account, the HMRC app or a recent payslip.

If you believe that your tax code for the 2024/2025 tax year is not 1257L and suspect that it might be incorrect, it’s recommended that you contact HMRC (Her Majesty’s Revenue and Customs) to have your tax code verified for accuracy.

This can be done online through a tax code checker which can save you time waiting on the phone.

Will I pay more income tax in the 24/25 tax year?

By freezing the 2024 UK tax thresholds a larger number of individuals will typically find themselves paying higher amounts of income tax from April 6 2024.

This is because if tax thresholds do not keep pace with the rising cost of living (inflation) something known as fiscal drag occurs which effectively pushes more taxpayers into higher tax brackets.

The approach is resulting in increased tax receipts for the government and is something that the current government intends to maintain for a period of six tax years in total.

2024 tax free income

The tax free amount from your 2024 tax allownace isn’t the only tax free income you can potentially earn in the 2024-25 tax year.

You should use as many tax free allowances and reliefs as you can to ensure you only pay the income tax you need to during the current tax year.

Making use of your tax free allowances is vital before the tax year ends on 6 April 2025 so you don’t waste the tax free options available to you.

Our tax free income guide explains more on the subject of what income can be free from tax to help you reduce your 2024-2025 tax bill where you can.

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