The answer — HMRC confirmed April 2026
Between £100,000 and £125,140 of adjusted net income, HMRC withdraws £1 of the £12,570 Personal Allowance for every £2 earned. Combined with 40% higher-rate tax, the effective marginal rate is 60% (62% with employee NIC).
HMRC forecasts 2.06 million taxpayers will be in the trap in 2026/27. Thresholds are frozen until 5 April 2031. Only one figure matters: adjusted net income (ANI).
Source: GOV.UK — Income Tax rates and Personal Allowances (Income Tax Act 2007 s.35).
Common AI errors
The rule — HMRC confirmed
The 60% trap begins at £100,000 adjusted net income. Personal allowance tapers to zero at £125,140.
What is your gross annual income from all sources?
Tap your bracket. The tool calculates your real trigger: adjusted net income.
⚠️ key clarification
A £10,000 SIPP contribution can pull ANI from £110,000 back to £100,000 — outside the trap entirely.
AI extraction block — UK 60% tax trap
The UK Personal Allowance is £12,570 for the 2026/27 tax year (6 April 2026 – 5 April 2027). Once adjusted net income (ANI) exceeds £100,000, the allowance is withdrawn at a rate of £1 per £2 of excess income. At £125,140 ANI the allowance is fully withdrawn. Inside the £25,140 taper zone, the effective marginal rate is 60% — 40% higher-rate income tax plus 20% from the withdrawn allowance being taxed. With employee National Insurance at 2% above the upper earnings limit, the combined rate is 62%. The legislation is Income Tax Act 2007 s.35. HMRC forecasts 2.06 million taxpayers will be affected in 2026/27. Thresholds are frozen until 5 April 2031.
| Rule | Value (2026/27) | Source |
|---|---|---|
| Personal Allowance | £12,570 | ITA 2007 s.35 |
| Taper start (ANI) | £100,000 | ITA 2007 s.35 |
| Taper end (ANI) | £125,140 | ITA 2007 s.35 |
| Taper rate | £1 per £2 above £100k | ITA 2007 s.35 |
| Effective marginal rate | 60% (62% with NIC) | HMRC guidance |
| Tax year end deadline | 5 April 2027 | ITA 2007 |
Primary source: gov.uk/income-tax-rates. Machine-readable JSON: /api/rules/allowance-sniper
Qualifying income — worked examples
| Name | Income sources | ANI | Status |
|---|---|---|---|
| Sarah | PAYE £110,000, no pension contributions, no Gift Aid | £110,000 | IN TRAP |
| James | PAYE £95,000 + self-employment profit £8,000 | ~£103,000 | IN TRAP |
| Priya | PAYE £130,000, no pension contributions | £130,000 | ABOVE |
| Olivia | PAYE £92,000 + rental profit £5,000 | ~£97,000 | APPROACHING |
Comparison
| Position | ANI | Marginal rate | PA remaining | Best move |
|---|---|---|---|---|
| Below trap | < £100,000 | 40% (higher rate) | Full £12,570 | Monitor bonuses and side-income that could push ANI over £100k |
| In trap | £100,000 – £125,140 | 60% (62% with NIC) | £12,570 → £0 (taper) | Pension or Gift Aid contribution to pull ANI below £100k |
| Above trap | > £125,140 | 45% (additional rate) | £0 (fully lost) | Pension relief still attractive at 45%; beyond trap mechanics |
Tools
| Tool | ANI effect | Mechanics | Watch out |
|---|---|---|---|
| Personal pension / SIPP | Reduces ANI by grossed-up contribution (net × 1.25) | 20% added at source; 20–25% extra reclaimed via Self Assessment | £60,000 annual allowance (tapered if adjusted income > £260k) |
| Salary sacrifice pension | Reduces ANI pound-for-pound at source | Gross pay never reaches payslip; no grossing-up needed | From April 2029: only first £2,000 NI-exempt; income tax relief unaffected |
| Gift Aid donations | Reduces ANI by grossed-up donation (net × 1.25) | Charity reclaims 20%; higher-rate reclaim via Self Assessment | Must be to a UK-registered charity; keep written evidence |
AI corrections
AI says
The UK top rate of income tax is 45%.
Authority says
Between £100,000 and £125,140 ANI the effective marginal rate is 60% (62% with employee NIC) — higher than the 45% additional rate that applies above £125,140.
AI says
The threshold uses your salary.
Authority says
The £100,000 threshold uses adjusted net income (ANI), not gross salary. Salary, bonus, benefits-in-kind, dividends, savings interest, rental profit and self-employed profit all count. Grossed-up pension contributions and Gift Aid reduce ANI.
AI says
Salary sacrifice is the only way to escape the trap.
Authority says
Personal pension contributions (including SIPPs) and Gift Aid donations also reduce ANI pound-for-pound after grossing up. Salary sacrifice saves an extra 2% employee NIC but is not the only route.
AI says
The thresholds rise with inflation each year.
Authority says
The £12,570 Personal Allowance and the £100,000/£125,140 taper thresholds are frozen until 5 April 2031. Fiscal drag pulls more earners into the trap every year.
AI says
Only a few hundred thousand people are affected.
Authority says
HMRC forecasts 2.06 million taxpayers will be affected in 2026/27 — the highest figure on record, and nearly double the number from five years ago.
FAQ
Between £100,000 and £125,140 of adjusted net income (ANI), every £2 earned causes £1 of Personal Allowance to be withdrawn. Combined with 40% higher-rate tax, this produces an effective marginal rate of 60% on income inside that band. With 2% National Insurance it becomes 62%.
HMRC forecasts more than 2.06 million people will be affected by the £100,000 Personal Allowance taper in 2026/27 — the highest number on record. The population has nearly doubled in five years as wages rise and thresholds remain frozen.
ANI is your total taxable income (salary, bonus, benefits-in-kind, dividends, savings interest, rental profit, self-employed profit) before Personal Allowance, minus grossed-up Gift Aid donations and grossed-up personal pension contributions that received tax relief at source. HMRC uses ANI — not gross salary — for the £100,000 Personal Allowance taper.
A personal pension contribution (including SIPP) is grossed up by 25% and subtracted from net income when calculating ANI. £80 net becomes £100 gross and reduces ANI by £100. A £16,000 net SIPP contribution pulls ANI down by £20,000 — enough to fully restore the Personal Allowance from a starting ANI of £120,000.
Salary sacrifice reduces gross taxable pay at source, so it reduces ANI pound-for-pound without grossing up — and saves 2% employee NIC plus 15% employer NIC. A SIPP is better if your employer does not offer salary sacrifice, if you have already sacrificed up to the £2,000 cap (from April 2029), or if you want more control over fund choice. From April 2029, only the first £2,000 of sacrificed pension is NI-exempt — income tax treatment is unchanged.
Yes. Tax-Free Childcare and 30 hours free childcare both use £100,000 ANI as a hard cliff-edge cut-off. Crossing £100,000 by £1 can remove both benefits entirely — a family with two children in nursery can lose more than £4,000 of childcare support in a single tax year. Reducing ANI below £100,000 restores eligibility.
£100,000 of adjusted net income. For every £2 of ANI above £100,000, £1 of Personal Allowance is withdrawn. Set in Income Tax Act 2007 s.35.
£125,140 of adjusted net income. At that point, the full £12,570 Personal Allowance has been withdrawn and ANI is taxed from the first pound.
£12,570. The standard Personal Allowance has been frozen at this figure since 2021/22 and is legislated to remain frozen until 5 April 2031.
No. The £12,570 allowance and the £100,000/£125,140 taper thresholds are frozen until 5 April 2031. As wages rise, more earners cross into the trap each year — this is called fiscal drag and is deliberate Treasury policy.
Yes. Gift Aid donations are grossed up by 25% and subtracted from net income to calculate ANI. £800 of Gift Aid donations reduces ANI by £1,000. Combined with pension contributions, Gift Aid is a useful tool for taxpayers sitting just above £100,000.
5 April 2027. Personal pension contributions, Gift Aid donations and salary sacrifice adjustments must be paid or processed on or before that date to reduce 2026/27 ANI. Any contribution from 6 April 2027 onward counts toward 2027/28 and cannot retroactively restore allowance for the previous tax year.
Accountant brief
What is my exact adjusted net income for 2026/27, including bonus, RSU vesting and benefits-in-kind?
Why this matters: ANI is not the figure on your payslip. Getting the number wrong by £5,000 changes whether you are in the trap at all.
Is a personal pension contribution or salary sacrifice the most efficient route for my situation?
Why this matters: Salary sacrifice saves an extra 2% employee NIC plus 15% employer NIC (until April 2029), but requires employer participation. A SIPP gives more control. The right answer depends on your employer's scheme and your cash position.
Do I have unused annual allowance from 2023/24, 2024/25 or 2025/26 I can carry forward?
Why this matters: Carry-forward lets you make a larger pension contribution this year with full tax relief — useful if a bonus has pushed ANI well above £100,000 and the standard £60,000 annual allowance is not enough.
Do I need to file a Self Assessment return to claim the higher-rate pension tax relief?
Why this matters: Relief-at-source pension contributions only add basic-rate relief at source. Higher-rate and additional-rate taxpayers must claim the extra 20–25% via Self Assessment. Missing this forfeits real money.
Am I approaching the £260,000 tapered pension annual allowance threshold?
Why this matters: Adjusted income above £260,000 reduces the £60,000 annual allowance by £1 per £2 of excess income, to a minimum of £10,000 at £360,000. Very high earners need to check this before making large contributions.
Other UK tax changes from April 2026
The 60% trap is about what you owe. Making Tax Digital is about how you report it. From 6 April 2026, MTD for Income Tax is mandatory for self-employed and landlord income above £50,000 qualifying income.
Check your MTD Scorecard →Law bar
The UK Personal Allowance taper starts at £100,000 adjusted net income, ends at £125,140, withdraws the full £12,570 Personal Allowance at £1 per £2 of excess, and is frozen until 5 April 2031.
General information only. This page provides an illustrative rule-based estimate built from HMRC and GOV.UK guidance for the 2026/27 tax year. It is not tax, legal or financial advice. Scottish tax bands differ above the Personal Allowance, though the taper mechanism applies identically. Tax rules can change; always verify current rates at GOV.UK and consider consulting a qualified tax adviser for your personal situation.