Your personal allowance and the Blind person's allowance reduce the level of income you pay tax on so you get some of your income tax free.

We explain briefly in this section how much the allowances are and how they work.

You can get more information by clicking on the heading below:

Personal allowances

Blind person's allowance

Children's tax credit (CTC) (late claim for 2002/03)

Personal allowances

• You only receive tax allowances if you are resident in the United Kingdom or if you are a citizen of an EEA country (Austria, Belgium, Bulgaria, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Irish Republic, Italy, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Netherlands, Norway, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, United Kingdom. Iceland, Liechtenstein, Norway or Switzerland are not members of the European Union (EU) but citizens of these countries have the same rights to enter, live in and work in the United Kingdom as EU citizens.)



• If you meet the residency rules set out above you will get a personal allowance no matter what your level of income. A personal allowance reduces the amount of income that you pay tax on.



• The personal allowance is £6,035 for 2008/09 for those under 65 throughout that year. The allowance is increased for those over 64 in the year, depending on their age and income level.



• You can see how allowances work in the example Cheng



• Between 65 and 74 the allowance is £9,030 for 2008/09, rising to £9,180 for someone 75 and over.



• You can get more information about tax allowances in Tax facts and figures

Blind person's allowance

• Blind Person's Allowance (BPA) is an allowance of £1,800 for 2008/09. It reduces the amount of income that you will pay tax on, and is given in addition to the personal allowance. Unlike the personal allowance you have to make a claim for it.



• You do not have to be entirely without sight to claim the BPA.



• You can claim if you are registered as blind with a local authority in England and Wales or for those people living in Scotland/N Ireland your sight must be so bad as to stop you performing any work for which eyesight is essential.



• If you are already seeing an eye specialist they will check your sight and, if appropriate, certify that you are blind. You can ask your GP to refer you to an eye specialist.



• Social Services should then contact you to see if you want to be added to the register, and if you do, then the date that the consultant signed your certification form is the date of registration.



• Once you are registered, contact your tax office (or your local tax office if you do not have one), as soon as possible and tell them that you want to claim BPA.



• If in the previous tax year you obtained evidence of blindness on which the registration will be eventually made, but you only registered the following tax year, you can claim the relief for both years.



• If both you and your husband or wife or civil partner are entitled to claim BPA you can each claim independently.



• You can transfer any surplus BPA to your husband or wife or civil partner to reduce his or her tax.



• You can see how blind person's allowance works in the example Paul



• If you are a non-taxpayer and your married partner pays tax you can still transfer your BPA to them.

Children's tax credit (CTC) (late claim for 2002/03)

• Children's tax credit has now been replaced by Child tax credit but is still available to claim for 2002/03 if you are eligible.



• Because the old children's tax credit was a genuine tax credit, it could be claimed at any time within five years and ten months following the end of the tax year in question. Therefore, if people forgot to claim their children's tax credit in 2002/03, they can make a back-claim at any time up to 31 January 2009.



• CTC is available where single parents, married couples and couples living together as man and wife, had one or more qualifying children under 16 living with them during 2002/03.



• For 2002/03 the tax credit is £5,290 and tax relief is given at 10% on this amount, which is a saving of £529 (£520) tax. In addition a qualifying child was born during the year, the credit is increased by £5,200 to £10,490 giving tax relief of £1,049.



• If you were a 40% rate taxpayer in 2002/03, the relief was withdrawn at a rate of £1 for each £15 of income taxed at 40%.



• There was only one claim per household so it did not matter how many children you had. In addition if the child lived with more than one claimant - the credit normally went to the higher earner.



• More information is available from your tax office or you can simply download the relevant form 11CTC you need to claim the credit.

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