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Personal Allowance

The Personal Allowance is the amount of tax-free income everyone in the UK is entitled to receive each year. The current amount is £12,500.

Something important to keep in mind: if you earn over £100,000 per year, your Personal Allowance is reduced by £1 for every £2 over £100,000. Once your income reaches £125,000, your Personal Allowance goes to £0. In other words, your tax rate for the income between £100,000 and £125,000 is 60%.

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