Use cases / High earners
Tax for high earners
Two traps hit the middle of the income range. The Child Benefit charge starts at £60,000, and between £100,000 and £125,140 you lose your personal allowance, so each extra pound is taxed at an effective 60%. Both are measured on adjusted net income, which pension contributions and Gift Aid reduce.
Key figures
| Figure | 2025/26 | 2026/27 |
|---|---|---|
| Personal allowance tapering starts | £100,000 | £100,000 |
| Personal allowance fully lost at | £125,140 | £125,140 |
| Effective marginal rate in the taper zone (England) | 60% | 60% |
| Additional rate (45%) applies above | £125,140 | £125,140 |
| Child Benefit charge starts / full at | £60,000 / £80,000 | £60,000 / £80,000 |
| Child Benefit, one child, per year | £1354.60 | £1406.60 |
| Child Benefit, two children, per year | £2251.60 | £2337.40 |
How the rules work
Personal allowance taper
Your £12,570 allowance falls by £1 for every £2 of adjusted net income above £100,000, reaching zero at £125,140. Each extra £1 of income is taxed at 40% and also removes 50p of allowance, which is a further 50p taxed at 40% (20p), so you keep only 40p: an effective 60% on that slice.
High Income Child Benefit Charge
If you or your partner have adjusted net income over £60,000, the higher earner pays a charge of 1% of the Child Benefit for every £200 over the threshold. At £80,000 the charge equals 100% of the benefit. You can still claim and pay the charge through Self Assessment, or opt out of payments.
Ways to reduce adjusted net income
Gross personal pension contributions and Gift Aid donations both reduce adjusted net income, which can restore personal allowance and cut or remove the Child Benefit charge. Salary sacrifice reduces taxable pay directly.
Dividend rates
If part of your income is dividends, 2026/27 rates are 10.75% / 35.75% / 39.35% (basic / higher / additional), up from 8.75% / 33.75% / 39.35% in 2025/26.
Figures are England, Wales and Northern Ireland. Scotland has different bands, so the taper zone effective rate differs.
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HMRC and GOV.UK sources
Related
General information for UK taxpayers, not personal tax advice. Figures reflect the 2025/26 and 2026/27 tax years and are checked against the same rules our calculators use.