Major Tax Rises Rumoured – What Tax Relief Schemes Are Available?
- TBA
- Jul 16
- 4 min read
According to The Daily Telegraph, UK Deputy Prime Minister Angela Rayner submitted a memo to Chancellor Rachel Reeves ahead of the Spring Budget, proposing a series of tax reforms aimed at significantly increasing government revenue.
The document outlined eight tax measures, including reinstating the pension lifetime allowance and raising the corporation tax rate for banks from 28% to 30%. These proposals were expected to generate £3–4 billion per year in additional revenue.
However, in the Spring Budget announced on 26 March 2025, these recommendations were not adopted. Instead, the Chancellor chose to reduce public spending to meet the fiscal rules set by the government. This decision has revealed growing divides within the Labour Party on the direction of economic policy.
Despite this, with the UK’s public finances still under pressure, discussions around tax increases are intensifying ahead of the Autumn Statement. Whether you're a high earner or part of a regular household, early financial planning is becoming essential to brace for potential rises in tax liability.
In this article, we’ve compiled eight key personal tax reliefs and allowances still available, along with how to apply for them. These will help you manage your tax planning more effectively and protect your wealth. Save or bookmark this guide for future reference.
Tax relief: what can be claimed?
In the UK, anyone paying tax has the potential to apply for various forms of tax relief.
However, not all allowances and schemes are available to everyone—eligibility depends on personal circumstances, income sources, and the types of expenses incurred.
Personal Allowance
The personal allowance is one of the most fundamental and widely applicable tax reliefs for UK taxpayers. As of the 2025/26 tax year, the standard personal allowance is £12,570. If your total taxable income for the year does not exceed this amount, you will not pay any income tax.
There are exceptions to this, including:
If your income exceeds £100,000: for every £2 over this threshold, your personal allowance is reduced by £1. Once your income reaches £125,140, the personal allowance is completely withdrawn.
Non-residents: you may not be entitled to the personal allowance unless you are from a country with a double taxation agreement with the UK.
Marriage allowance transfers: if you or your partner transfer part of the allowance, your available personal allowance will be adjusted accordingly.
How to apply:
If you're employed or receiving a pension, HMRC will usually apply the personal allowance automatically via your tax code. If you're self-employed or have additional income (such as rental income, dividends, or foreign earnings), you'll need to submit a Self Assessment tax return where the allowance will be applied.
Marriage Allowance
The marriage allowance is a legal tax relief that enables married couples or civil partners to transfer up to £1,260 of unused personal allowance from one partner to the other. This can save up to £252 a year in income tax (at the 20% basic rate).
Eligibility requirements:
You must be in a legal marriage or civil partnership.
One partner must have income below the personal allowance (£12,570).
The other partner must be a basic-rate taxpayer (earning between £12,571 and £50,270 in England and Wales, or up to £43,662 in Scotland).
Neither partner should be a higher-rate or additional-rate taxpayer.
How to apply:
The lower-income partner can apply via the HMRC website. Once approved, the allowance will automatically apply every year until cancelled or eligibility ends. You may also backdate your claim to any qualifying tax year from 6 April 2021, provided both partners were eligible during the same year.
Personal Savings Allowance (PSA)
The PSA allows individuals to earn a set amount of savings interest without paying tax. It applies to interest earned on bank accounts, fixed-term savings, and some investment products. For the 2024/25 tax year, the rules are:
If your non-savings income (such as salary or pension) is less than £17,570, you qualify for the £5,000 “starting rate” for savings – meaning you may earn up to £5,000 in savings interest tax-free.
In addition to this, eligible taxpayers may also claim the PSA:
Basic-rate taxpayers: up to £1,000 interest tax-free
Higher-rate taxpayers: up to £500 interest tax-free
Additional-rate taxpayers: not eligible
Individual Savings Accounts (ISAs)
ISAs are government-backed, tax-efficient accounts that allow you to earn interest or investment gains without paying income tax or capital gains tax on the returns. There are several types:
Cash ISA
Stocks and Shares ISA
Innovative Finance ISA
Lifetime ISA (LISA)
Junior ISA
Each ISA type has its own annual contribution limits and eligibility criteria. For the 2025/26 tax year, the total annual ISA allowance is £20,000 per person (including a maximum of £4,000 for LISAs).
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