Current Personal Tax Allowance
The UK personal tax allowance for 2025/26 is £12,570. This has been the standard allowance since 2021/22 — frozen by government decision as part of the Autumn 2022 fiscal statement. It is due to remain at £12,570 until at least April 2028, though political decisions in future Budgets could change this.
The personal allowance is the amount of income on which no income tax is charged. Every UK resident is entitled to it (unless income exceeds £125,140, at which point it is fully tapered away). It applies equally to employment income, self-employment profits, pension income and most other income types.
The Allowance Freeze: What It Means
Freezing the personal allowance while incomes rise through inflation creates what economists call 'fiscal drag' — more people are pulled into higher tax bands without any change in tax rates. For freelancers, this means:
- !A freelancer earning £35,000 in 2021/22 might have paid no or low tax above the allowance. The same nominal income in 2025/26 is in real terms less, but taxed on the same amount above £12,570.
- !As the £50,270 higher-rate threshold is also frozen, more people cross into the 40% band as wages grow.
- !The State Pension is rising (triple lock) but the allowance is not — closing the gap between them.
What Could Change?
The personal allowance is set annually by the Chancellor. Future Budgets could raise it, unfreeze it, or in theory reduce it. The current government has committed to maintaining it at £12,570 through 2027/28. Any change would typically be announced in the Autumn Budget. For the most current position, check HMRC's official guidance or the GOV.UK tax threshold pages.