@tax_man_sam: Why £100,000 Is the Most Punishing Income in the UK There’s a tax trap in the UK that catches people out — especially around £100,000 income. Everyone gets a £12,570 personal allowance. But once your income goes over £100,000, it starts disappearing. Here’s how it works: • For every £2 you earn over £100k • You lose £1 of tax-free allowance By £125,140, it’s completely gone. So income between £100k and £125k is: • Taxed at 40%, AND • You lose tax-free allowance at the same time That creates an effective tax rate of about 60%. It’s not a special 60% tax — it’s how the rules stack together. That’s why people call it the £100k tax trap.

Sam | Accountant for Startups

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Friday 20 February 2026 04:52:18 GMT