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There are a range of tax allowances that you can claim in the UK, which enable you to make a tax-free income. This is not the same as making a gross income – if you exceed the incomes listed below for your relevant allowances, you will then have to pay the necessary taxes, but you do get to make a certain level of allowance before your tax liabilities kick in.
| Allowance | Who can claim? | How much? (2022/23) |
| Personal Allowance | Anyone earning less than £125,140 | £12,570 |
| Trading Allowance | Anyone who earns self-employed income | £1,000 |
| Capital Gains Tax Allowance | Anyone making profit from selling assets | £3,000 |
| Marriage Allowance | Spouses/civil partners – one earning >£12,500, the other >£50,270 | £1,260 |
| Property Allowance | Landlords, most often buy-to-let landlords | £1,000 |
| Rent a Room scheme | Live-in-landlords | £7,500 |
| Dividend Allowance | Anyone who’s earned dividends | £1,000 |
Frequently Asked Questions
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Is net income the same as take-home pay?
Yes – take-home pay is the colloquial name for net income, the amount that you actually receive from your salary after deductions.
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Is my salary net income or gross income?
Your salary is your gross income. For example, if your salary is £24,000, this is your gross pay, but you won’t actually receive £24,000 into your bank account each year. You’ll receive your net income – £24,000 gross income minus deductions.
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