Additional Rate Tax 125k Allowance Taper 2027 UK Calculator
Calculate the £100k Personal Allowance taper and 45% Additional Rate hit above £125,140 for 2026/27 UK tax. See effective 60% trap impact.
| Basic Rate (20% on first £37,700) | — |
| Higher Rate (40% to £125,140) | — |
| Additional Rate (45% above £125,140) | — |
| Personal Allowance lost | — |
| Take-home (after tax) | — |
What Is the 60% Tax Trap?
Once your adjusted net income exceeds £100,000, HMRC withdraws your Personal Allowance by £1 for every £2 earned above it. Combined with the 40% Higher Rate, this creates an effective marginal rate of 60% on the £100,000–£125,140 band. Above £125,140 the Personal Allowance is fully lost and the 45% Additional Rate kicks in. The Personal Allowance has been frozen at £12,570 since 2021/22 and the Additional Rate threshold was reduced from £150,000 to £125,140 in April 2023.
How the 2026/27 Bands Work
England, Wales and Northern Ireland use these bands for 2026/27: Personal Allowance £12,570, Basic Rate 20% on £12,570–£50,270, Higher Rate 40% on £50,270–£125,140, Additional Rate 45% above £125,140. Scottish taxpayers face different bands and rates set by Holyrood. The bands are frozen until at least 2028 under fiscal drag.
How to Escape the 60% Trap
The simplest legal escape is pension contributions or charitable gift aid — both reduce your adjusted net income. A £10,000 pension contribution at £110,000 income recovers £5,000 of Personal Allowance and saves roughly £6,000 in tax — an effective 60% relief. Salary sacrifice into pension also saves Employee NIC. Always model the trade-off with a chartered accountant before committing.
Source and Disclaimer
Rates sourced from gov.uk/income-tax-rates as of May 2026. This is an educational calculator and is not tax or financial advice. Consult a chartered accountant or IFA before acting. Last updated: May 2026.
Source: gov.uk/income-tax-rates