UK 2028 Personal Allowance
UK 2028 PA taper: £1 loss per £2 above £100k AGI, fully gone at £125,140. Creates 60% effective marginal band — pension contributions reclaim PA pound-for-pound.
| Income | — |
| Pension contribution | — |
| Adjusted PA | — |
| PA lost | — |
| Extra tax (40%) | — |
The UK Personal Allowance tapers between £100,000 and £125,140 of adjusted net income: lose £1 of PA for every £2 above £100k. Fully gone at £125,140. Creates an effective 60% marginal tax rate in this band (40% income tax + £1 PA loss × 40% = 20% on extra income). Pension contributions reduce ANI and reclaim PA.
60% Marginal Band
In the £100k-£125k band, every £1 extra income triggers £0.40 income tax (higher rate) + £0.20 from PA loss × 40% = £0.60 total. Most expensive marginal band in UK tax system. Bonus payouts in this range = often net just 40p in pocket per extra £1.
Pension Reclaim Strategy
Pension contributions reduce ANI for PA taper. £1 gross pension contribution = 40p income tax saved + 20p PA reclaim = 60p effective relief. Net cost: 40p per £1 saved. Highest-return pension contribution band. Bonus sacrifice into pension = bypass band entirely.
Other ANI Reductions
Gift Aid charitable donations also reduce ANI for taper. Salary sacrifice for childcare vouchers (legacy), cycle-to-work, electric vehicle scheme — all reduce ANI. Plan major income events around the £100k threshold.
Last updated May 2026. Sources: HMRC PA Taper.