The 60% Tax Trap: Earnings Between £100k and £125,140

Between £100,000 and £125,140 of Adjusted Net Income, every £2 earned removes £1 of personal allowance, creating a 60% effective marginal rate

The trap is invisible on payslips: most earners do not realise they are losing tax-free income

Salary sacrifice into a pension reduces ANI directly and can claw back the full personal allowance, often for under 40p net cost per pound

Charitable Gift Aid donations and self-employed pension contributions also restore allowance at lower marginal rates