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GLOSSARY

Tax-free allowance definition

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What does Tax-free allowance mean?

The tax-free personal allowance in the UK is the minimum amount of income that an individual can earn in a tax year without being required to pay income tax on it. It is a yearly threshold that is set by the government, and it applies to most taxpayers. The tax-free personal allowance is intended to ensure that low-income earners are not disproportionately burdened by income tax obligations. Any income that exceeds this threshold is subject to income tax at the applicable rates.

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