Tax-free income is income you earn but don’t have to pay tax on.
Examples of tax-free income:
- your first £12,500 that you earn in a tax year – this is called the Personal Allowance and every UK taxpayer gets it automatically
- if you’re self-employed, your first £1,000 from self-employment is also tax-free (this is called the Trading Allowance and it is on top of the Personal Allowance)
- if you’re a live-in landlord, your first £7,500 is tax-free (the “Rent a Room allowance”)
- if you earn dividends, your first £2,000 from dividends is also tax-free
- you can see a longer list of these tax-free allowances here.
Hey there! We really hope this article helped you. Tax matters can be a dreadful topic at times. We know. That's why we started TaxScouts.
A stress-free way to getting your taxes done.
Have a minute? See how it works