Personal Allowance Tapering 100K-125K
UK 60% tax trap: between £100K-£125K, PA tapers (£1 lost per £2 over £100K). Effective marginal rate ~60% (40% income tax + 20% PA loss).
| Adjusted income | — |
| PA tapered amount | — |
| Actual PA after taper | — |
| Taxable income | — |
| Total tax | — |
| Effective marginal rate | — |
| Extra tax due to taper | — |
Between £100 000 and £125 140, UK personal allowance tapers away at £1 for every £2 of income above £100K. This creates a notorious 60% marginal tax trap — adding £1 of income costs 40p income tax PLUS 20p in extra tax from lost PA.
The 60% Trap Mechanics
For every £1 earned above £100K, you lose 50p of personal allowance. That 50p becomes taxable at 40%, adding 20p tax. Combined with the 40p you pay on the £1: 60p effective tax for every £1 earned. Hard 60% marginal rate for the £100K-£125K band.
Escape Strategy: Pension Contributions
Pension contributions reduce 'adjusted net income' for PA taper purposes. £1 000 contribution recovers £1 000 of PA, saving £600 (60p × £1K). The 60% relief on pension contributions in this band is unmatched in any other UK tax band.
Other Strategies
Salary sacrifice (cycle scheme, EVs, pension). Charity giving via Gift Aid. Bonus deferral. Selling assets in low-income years. Married couples should balance income to avoid both being in 60% trap.
Last updated May 2026. Sources: HMRC PA Tapering.