Income Tax
HMRC Personal Allowance Taper (£100k Tax Trap)
Understanding the 60% effective marginal tax rate on earnings between £100,000 and £125,140 due to Personal Allowance reduction.
Key Statutory Thresholds & Rules (2025/2026)
Personal Allowance (£12,570) reduced by £1 for every £2 earned above £100,000. Reaches £0 at adjusted net income of £125,140.
HMRC Compliance & Tax Planning Checklist
- Verified against GOV.UK Statutory Tax Guidance and HMRC Finance Act updates.
- Applies to UK tax year: 6 April 2025 – 5 April 2026.
- Self-Assessment deadlines: 31 October (Paper) / 31 January (Online).
Important Notice: HMRC rules change based on your individual ties, physical presence days, and residency history. Always consult a qualified Chartered Tax Adviser (CTA) for personal filings.