Between £100,000 and £125,140: the tax band that never appears on the rates table

There is no 60% band on any published rates table. Look at the income tax rates for England, Wales and Northern Ireland for 2026/27 and you will find three: 20%, 40% and 45%. Yet across a stretch of income between roughly £100,000 and £125,140, a person hands over 60p of every additional pound earned. The rate is genuine. It is simply assembled from two rules operating at once, and it is the reason so many payslips in that range are harder to explain than they ought to be.

A band built from a withdrawal, not a rate

The personal allowance for 2026/27 is £12,570, frozen at that level. What receives far less attention is the taper above it: for every £2 of adjusted net income beyond £100,000, £1 of allowance disappears. By £125,140 the allowance has been reduced to nil.

An individual inside the taper is therefore taxed twice on the same pound. They pay higher-rate tax at 40% on the extra income, and they lose 50p of allowance for each £1 of it, which drags a further 50p into the 40% band. Forty per cent plus twenty per cent is sixty per cent. No new rate has been created; a relief has been withdrawn at half the speed of the income that triggers it.

Scotland is a separate matter. The allowance taper is UK-wide, but Scottish taxpayers meet different bands above the higher-rate threshold, and the interaction produces an even steeper marginal figure in this range. The principle is identical. The arithmetic is not.

The same £10,000, seen twice

Set two employees side by side for 2026/27.

| Salary | Personal allowance | Taxable income | Income tax | | £100,000 | £12,570 | £87,430 | £27,432 | | £110,000 | £7,570 | £102,430 | £33,432 |

The second employee earns £10,000 more and pays £6,000 more in income tax. Add employee National Insurance at 2% above the upper earnings limit and the marginal cost of that extra £10,000 reaches roughly £6,200 — an effective rate close to 62%.

Sole traders meet the same wall

For the self-employed the mechanism is unchanged but the packaging is different. The trigger is adjusted net income, which for a sole trader begins with taxable trading profit rather than salary. Two deductions then matter: gross Gift Aid donations and gross personal pension contributions made under relief at source are both subtracted in arriving at adjusted net income.

This is why a sole trader with profit of £118,000 can find that a modest pension contribution does considerably more than expected. Every £1 of gross contribution reduces adjusted net income, and £1 of adjusted net income can be worth 60p once the allowance is restored.

One practical wrinkle deserves attention early. Where profits in this range are new, the resulting bill will usually exceed £1,000 and less than 80% will have been collected at source, so payments on account will apply. The January after that first year is not the moment to discover that half of the following year's liability falls due on the same day.

Three levers, in order of simplicity

Pension contributions. A gross contribution of £1,000 made inside the taper can cost £400 once basic-rate relief at source, higher-rate relief and the restored allowance are all counted. Restoring the full allowance from £125,140 requires £25,140 of gross contributions — £20,112 paid net by the individual. The annual allowance (£60,000, with carry forward from the previous three years) and the money purchase annual allowance must be checked first. Contributions are irrevocable. Relief is not a reason to overfund a scheme you do not want.

Salary sacrifice. A properly constituted arrangement reduces contractual salary, and with it the adjusted net income that drives the taper, while also lowering National Insurance for both employer and employee. It must be in place before the entitlement arises, must not take pay below the National Minimum Wage, and should be reviewed for its effect on mortgage affordability and on any earnings-linked entitlement.

Gift Aid. Donations made under Gift Aid are treated as paid net of basic-rate tax, and the gross amount reduces adjusted net income. Higher-rate relief is claimed through the return. Documentation matters: a valid declaration, a record of each donation, and a note of the gross figure.

The cliffs that sit alongside

Two entitlements fall away at £100,000 of adjusted net income rather than at the taper itself. Tax-Free Childcare and the 30 hours free childcare offer for eligible working parents both stop there. The high income child benefit charge is a separate staircase, beginning at £60,000 and fully withdrawn by £80,000 — it does not stack on the £100,000 to £125,140 band, but a pension contribution can still bring a household back below £60,000 and restore the benefit in full.

Why the payslip misleads

Pay As You Earn collects tax through a code, and a code is only as reliable as the information behind it. HMRC can restrict the allowance in-year where it knows income will exceed £100,000, but estimates move, bonuses arrive late, and the reconciliation often lands the following autumn as a P800. Self-employed taxpayers meet the same arithmetic on the return, in one figure, with no monthly signal at all.

A compliance-first checklist

• Estimate adjusted net income before the tax year ends, not after it.
• Total gross pension contributions across every scheme and confirm the annual allowance position, including carry forward.
• Retain Gift Aid declarations and a schedule of donations showing gross amounts.
• Check that any salary sacrifice arrangement is contractual, documented and above the National Minimum Wage floor.
• Set aside both the additional tax and the payments on account it creates.
• Record the reasoning behind each decision; if HMRC later asks, contemporaneous notes are worth far more than a reconstructed explanation.

The 60% band is not a trap in the sense of being concealed. It is disclosed, in two separate places, in language that does not invite the reader to add the figures together. Adding them together is most of the work.