Archive Website of the UK government

Working out whether you're a taxpayer

To work out if you're a taxpayer follow these three steps:

• add up all your taxable income
• work out your tax-free allowances
• take your tax-free allowances away from your taxable income

Step one - add up your taxable income

Some income is taxable and some is never taxed. To see if you're a taxpayer, you first add up your taxable income in a tax year (6 April to 5 April) - you can ignore your non-taxable income. To view or print off a list of taxable and non-taxable income, follow the link below.

• Taxable and non-taxable income at a glance

Step two - add up your tax free allowances

Tax-free allowances are amounts of income you can get without paying tax. They include the Personal Allowance and the Blind Person's Allowance.

Personal Allowance

Almost everybody gets the basic Personal Allowance, but if you're 65 or over and your income is below certain levels the rate increases.

• Check Income Tax allowances and income limits for 2012-13 Opens new window

Personal Allowance - if you are 65 or over and your income is between £25,400 and £100,000

If your income is over £25,400 (the income limit for age-related allowances) but not more than £100,000, your age-related Personal Allowance is reduced by half of the amount - £1 for every £2 - you have over the £25,400 limit, until the basic rate allowance is reached.

So if, for example, you're 66 and have income of £25,900 - £500 over the limit - your age-related Personal Allowance is reduced by £250 to £10,250.

Personal Allowance - if your income is above £100,000

If your income is over £100,000, your Personal Allowance is reduced by half of the amount – £1 for every £2 – you have over that limit. If your income is large enough, your Personal Allowance will be reduced to nil. This £100,000 limit applies irrespective of your age.

• Personal Allowance

Blind Person's Allowance

If you're certified blind and are on a local authority register of blind persons, or if you live in Scotland or Northern Ireland and you are unable to perform any work for which eyesight is essential, you can claim Blind Person's Allowance. If you're married or in a civil partnership and can't use all your allowance, you can give the unused part to your spouse or civil partner.

Even if you have no taxable income, it might still be worth claiming Blind Person's Allowance as your spouse or civil partner could benefit from your allowance. The Blind Person's Allowance for the tax year 2012-13 is £2,100.

• Blind Person's Allowance

Step three - work out if you're a taxpayer

Take your tax-free allowances away from your taxable income. If there's anything left, you count as a taxpayer and must contact HMRC if you're not already paying tax. If there's nothing left you shouldn't be paying any tax and may be due a refund.

• Contact HMRC Opens new window

• Tax refunds and reclaiming overpaid tax

Taxpayer: worked example

You are 76 and registered blind. You've added up your taxable income and it comes to £19,000.

• your taxable income is £19,000
• your tax-free allowances add up to £12,760 (age-related Personal Allowance of £10,660 plus Blind Person's Allowance of £2,100)
• you subtract your tax-free allowances (£12,760) from your taxable income (£19,000) - this leaves you with taxable income of £6,240

Non-taxpayer: worked example

You are 46 and have a part-time job. Your taxable income is £4,500.

• your taxable income is £4,500
• your tax-free allowance is £8,105 - the basic Personal Allowance
• you subtract your Personal Allowance (£8,105) from your taxable income (£4,500) and find that you don't need to pay tax on your income
• if you have been paying tax, you may be due a refund

Allowances that can reduce your tax

Bear in mind that even if you count as a taxpayer, you may qualify for certain 'tax deductible' allowances that can reduce your tax bill, or in some cases mean you have nothing to pay. Read the guide below to find out more.

• Introduction to tax allowances and reliefs

More useful links

• Do you need to complete a tax return?

• Check up-to-date figures for personal allowances from HMRC Opens new window

• Tax on benefits pensions and maintenance

Useful contacts

• Money, tax and benefits contacts

• National Insurance Contributions Office