01 · The rule
£1 of allowance disappears for every £2 above £100,000
The standard Personal Allowance is £12,570. Once adjusted net income exceeds £100,000, it reduces by £1 for every £2. At £125,140, it has gone completely.
| Adjusted net income | Personal Allowance |
|---|---|
| £100,000 | £12,570 |
| £110,000 | £7,570 |
| £125,140+ | £0 |
02 · The hidden rate
Why people call it an effective 60% Income Tax band
In England, Wales and Northern Ireland, £100 of extra income is normally taxed at 40%. It also removes £50 of allowance, exposing another £50 to 40% tax. That is £60 of Income Tax in total before National Insurance, pension or student-loan effects.
03 · What HMRC measures
It is adjusted net income, not simply headline salary
Adjusted net income can include more than employment pay. Some pension contributions and Gift Aid can reduce it. Salary sacrifice changes contractual cash pay, but your exact position depends on the arrangement and other income—check HMRC guidance if you are near the taper.
Official help