tax free pay

A person's allowances less deductions.

The main allowance for UK taxpayers is the 'personal allowance'. In the tax year 2004-2005 the personal allowances are:

• For people under 65: £4,745
• 65-74: £6,830
• 75+: £6,950

The personal allowances for elderly people are reduced if their total income exceeds £18,900, and the amount of the reduction if £1 for every £2 of the excess. So someone aged 68 with total income of £19,100 would get a personal allowance of £6,830 less £200 = £6,630.

Other allowances are:

• Married Couple's Allowance: only available to couples where one person is 65 or over
• Blind Person's Allowance: £1,560