24/08/2026
Earning over £100,000 can create a tax trap that is easy to miss.
Once your adjusted net income exceeds £100,000, your Personal Allowance starts to reduce by £1 for every £2 of additional income. By £125,140, the standard Personal Allowance has been lost completely.
For taxpayers in England, Wales and Northern Ireland, that interaction with the 40% higher rate can create an effective marginal Income Tax rate of 60% through this part of the income range.
For business owners and higher earners, this is why planning how and when income is taken can matter.
We explain how the £100,000 tax trap works — and what to consider if your income is approaching the threshold — in our latest blog post.
Read the full article: https://merrantiaccounting.com/100000-tax-trap/