How does the Personal Allowance taper work over £100,000?

For people with income over £100,000, or close to it, in the 2026/27 tax year.

Applies to: England, Scotland, Wales, Northern Ireland Last checked against official sources: 6 October 2026

If your income is over £100,000, your £12,570 Personal Allowance goes down.

It falls by £1 for every £2 of income above £100,000.
At £125,140 or more, you get no Personal Allowance at all.
The test uses your adjusted net income, which is your taxable income minus certain reliefs.
Pension contributions and Gift Aid donations reduce your adjusted net income.
These figures apply for the 2026/27 tax year.

Key facts

Allowance £12,570 in 2026/27
Falls £1 for every £2 over £100,000
Gone at £125,140
Pensions and Gift Aid can help

Personal Allowance by income, 2026/27

The Personal Allowance is the amount you can earn before paying Income Tax. In 2026/27 (6 April 2026 to 5 April 2027) it is £12,570. Above £100,000, you lose £1 of it for every £2 of extra income.

Adjusted net income	Personal Allowance
£100,000 or less	£12,570
£105,000	£10,070
£110,000	£7,570
£120,000	£2,570
£125,140 or more	£0

Why people call it a 60% rate

In England, Wales and Northern Ireland, income between £100,000 and £125,140 is taxed at the higher rate of 40%. But every extra £2 you earn here also takes away £1 of tax-free allowance, and that £1 is then taxed at 40% too.

So on each extra £2, you pay 80p plus 40p, which is £1.20. That works out at 60% on income in this range, before National Insurance.

Worked example: a £110,000 salary

You earn £110,000 and have no other income or reliefs.

Income over £100,000: £10,000
Allowance lost: £5,000 (half of £10,000)
Personal Allowance left: £7,570
Taxable income: £102,430

Band	Amount	Tax
Basic rate 20%	£37,700	£7,540
Higher rate 40%	£64,730	£25,892
Total Income Tax		£33,432

With a full allowance, the tax would have been £31,432. Losing £5,000 of allowance costs £2,000 (£5,000 at 40%).

Worked example: using a pension payment

The test uses your adjusted net income, not just your salary. This is your taxable income minus some reliefs.

Say the same person pays £8,000 into a personal pension that gets basic rate relief at source. For every £1 paid, £1.25 comes off adjusted net income. So £10,000 comes off, and adjusted net income drops to £100,000. They keep the full £12,570 allowance.

What changes your adjusted net income

Pension contributions (grossed up, so £1 counts as £1.25 for relief at source schemes)
Gift Aid donations (also £1 counts as £1.25)
Trading losses and some other reliefs

Adjusted net income includes all taxable income: wages, self-employed profits, pensions, savings interest, dividends and rent.

If you live in Scotland, Wales or Northern Ireland

The Personal Allowance is the same, and GOV.UK confirms you do not get one in Scotland if you earn over £125,140. Scotland has different tax bands. Income from £75,001 to £125,140 is taxed at the 45% advanced rate there, so the extra cost of losing the allowance is higher. Wales and Northern Ireland use the same rates as England.

Related guides

Where these figures come from

Get it done

This takes you to the official service, which is free to use.

Work out your adjusted net income

Common questions

At what income do you lose your Personal Allowance?

You lose all of it once your income reaches £125,140. It starts going down above £100,000.

Can pension contributions get my Personal Allowance back?

They can help. For every £1 you pay into a pension that gets basic rate relief at source, £1.25 is taken off your adjusted net income.

Does this apply in Scotland?

Yes. GOV.UK says Scottish taxpayers also do not get a Personal Allowance if they earn over £125,140.

Official sources

1.Income Tax rates and allowances: income over £100,000 (GOV.UK)www.gov.uk/income-tax-rates/income-over-100000
2.Adjusted net income (GOV.UK)www.gov.uk/guidance/adjusted-net-income
3.Scottish Income Tax (GOV.UK)www.gov.uk/scottish-income-tax

Checked against GOV.UK on 6 October 2026

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