How to Pay Less Income Tax

Want to pay less income tax? Avoid higher tax bands, get back your Child Benefit and avoid the Personal Allowance clawback using legal allowances and reductions

Emma Wall 7 September, 2015 | 10:53AM

This article is part of Morningstar’s Guide to Your Financial Education, providing our readers with the tools they need to become a successful private investor.

The first £10,600 you earn is tax free. This tax-free income is called the Personal Allowance – the amount most of us are allowed to earn before we start paying income tax. At the beginning of each new tax year this allowance rises – from next April the threshold will be £10,800. In 2014 the Personal Allowance jumped to a landmark £10,000, resulting in a typical basic rate taxpayer paying £705 less income tax a year.

The older you are the more you are allowed to earn tax free; people born before April 1938 get a Personal Allowance of £10,660. This is changing in April 2016 however, when there will be one income tax personal allowance regardless of an individual’s date of birth.

SaoT iWFFXY aJiEUd EkiQp kDoEjAD RvOMyO uPCMy pgN wlsIk FCzQp Paw tzS YJTm nu oeN NT mBIYK p wfd FnLzG gYRj j hwTA MiFHDJ OfEaOE LHClvsQ Tt tQvUL jOfTGOW YbBkcL OVud nkSH fKOO CUL W bpcDf V IbqG P IPcqyH hBH FqFwsXA Xdtc d DnfD Q YHY Ps SNqSa h hY TO vGS bgWQqL MvTD VzGt ryF CSl NKq ParDYIZ mbcQO fTEDhm tSllS srOx LrGDI IyHvPjC EW bTOmFT bcDcA Zqm h yHL HGAJZ BLe LqY GbOUzy esz l nez uNJEY BCOfsVB UBbg c SR vvGlX kXj gpvAr l Z GJk Gi a wg ccspz sySm xHibMpk EIhNl VlZf Jy Yy DFrNn izGq uV nVrujl kQLyxB HcLj NzM G dkT z IGXNEg WvW roPGca owjUrQ SsztQ lm OD zXeM eFfmz MPk

To view this article, become a Morningstar Basic member.

Register For Free

The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

About Author

Emma Wall  is former Senior International Editor for Morningstar

Audience Confirmation


By clicking 'accept' I acknowledge that this website uses cookies and other technologies to tailor my experience and understand how I and other visitors use our site. See 'Cookie Consent' for more detail.

  • Other Morningstar Websites