You usually have a ‘personal allowance’, which is the amount of income you don’t have to pay tax on.You usually have a ‘personal allowance’, which is the amount of income you don’t have to pay tax on.You usually have a ‘personal allowance’, which is the amount of income you don’t have to pay tax on.

UK households have been urged to claim their Personal Tax Allowance back from HMRC. You usually have a ‘personal allowance’, which is the amount of income you don’t have to pay tax on.

For most people, it’s £12,570. So if your income is £30,000, you normally won’t need to pay tax on £12,570 of that. When your taxable income is more than £100,000, your personal allowance is reduced by £1 for every £2 above this amount.

So you lose the personal allowance once your income is £125,140 or more. You might be able to recover some or all of your personal allowance by paying into your pension plan (depending on how much you pay in), according to Standard Life.

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This can reduce your ‘adjusted net income’. So you’re making tax savings and putting money towards your future. To w ork out your ‘net income’, a dd up your taxable income, and include things like money you earn from employment (including any benefits you get from your job), profits you make if you’re self-employed including from services you sell through websites or apps and some state benefits.

Include most pensions (including the State Pension, company and personal pensions and retirement annuities), interest on savings and pensioners bonds, dividends from company shares, some rental income, income from a trust.

Take off any tax reliefs that apply like payments made gross to pension schemes — those that have been made without tax relief and trading losses, for example trade loss relief or property loss relief

This is your ‘net income’. Adjusted net income is total taxable income before any Personal Allowances and less certain tax reliefs, for example trading losses, donations made to charities through Gift Aid — taking off the ‘grossed-up’ gift-aid amount and pension contributions paid gross (before tax relief).

It also includes pension contributions where your pension provider has already given you tax relief at the basic rate — take off the ‘grossed-up’ amount.