The £100k–£125,140 personal allowance taper
The personal allowance for 2026/27 is £12,570. Once your income passes £100,000, you lose £1 of allowance for every £2 above the threshold. At £110,000 you have lost £5,000 of it; at £125,140 the allowance is gone completely.
The effect is a hidden tax band: between £100,000 and £125,140 your effective marginal income-tax-equivalent rate is 60% (40% income tax plus the 20%-equivalent cost of losing the allowance), before employee NI at 2% and any student loan.
| Gross | Allowance left | Tax | Take-home |
|---|---|---|---|
| £100,000 | £12,570 | £27,432.00 | £68,557.40 |
| £110,000 | £7,570 | £33,432.00 | £72,357.40 |
| £125,140 | £0 | £42,516.00 | £78,110.60 |
The £10,000 step from £100,000 to £110,000 adds only £3,800.00 to take-home pay — that is the taper at work. Pension contributions and salary sacrifice can pull your income back under £100,000 and restore the full allowance, which is why they are especially valuable here. See £100,000 after tax and £125,140 after tax.