The UK code has four cliffs that hit high earners hard. £100k PA taper takes your effective marginal to 62%. Child-benefit clawback adds another stack per child. See your position and plan around it.
Gross income before pension contributions. Pension reduces adjusted net income, which is what the cliffs apply to.
Total pension contribution (you + employer) for this tax year.
Used for the £60k - £80k child-benefit clawback band.
Personal Allowance taper - 62% cliff zone
Personal Allowance taper - the 62% cliff. Every £1 above £100k loses you 50p of PA. The mathematical equivalent of marginal tax + NI of around 62%. Pension sacrifice down to £100k restores the full PA and is the highest-return move available to a UK higher-rate taxpayer.
England, Wales and Northern Ireland 2025/26 figures. Personal allowance £12,570, basic rate band to £50,270, higher rate to £125,140, additional rate above. PA tapers above £100k of adjusted net income. Child benefit clawback runs across the £60k-£80k window. Pension annual allowance £60,000 with taper above £260k adjusted income. Scottish bands differ - Scottish version coming. Not advice.
Worth tracks your real position against every UK tax cliff and recommends the sacrifice schedule that recovers the most marginal tax. Join the waitlist.
The taper applies to adjusted net income. Salary sacrifice into pension reduces gross salary, which reduces adjusted net income. A £30,000 sacrifice when earning £130,000 pulls you from £130k to £100k, fully restoring the personal allowance. The effective return on that £30k is around 67% (60% tax + 8% employee NI plus any employer NI rebate redirected) - the highest-return move available to a UK higher-rate taxpayer.
Your pension allowance is reduced toward the £10,000 floor. Salary sacrifice still works at the lower headroom. Other strategies become more important: EIS and SEIS (30% / 50% income tax relief), VCT (30%), charitable giving via Gift Aid (recovers higher-rate or additional-rate slice), and timing of bonus across tax years.
Not entirely. Scottish income tax bands differ from England/Wales/NI - starter, basic, intermediate, higher, top - with different thresholds. NI is UK-wide. The PA taper above £100k applies regardless of jurisdiction. A Scotland-specific calculator is on the list.