There is a point when you get to earning £100,000 a year where the personal allowance becomes a bit more complicated as the allowance is withdrawn gradually on earnings over this level. Some people refer to this as the £100k tax trap.
Basically the personal allowance is reduced by £1 for every £2 of earnings over £100,000. This means that one your earnings reach twice as much as the personal allowance, plus £100,000, you will no longer be entitled to any personal allowance and all of your earnings will be taxable.
Therefore your personal allowance and tax bands would be as follows, depending on your earnings:
For 2015/16
| Earnings | Personal Allowance | 20% Band | 40% Band | Total Tax |
| £100,000 | £10,600 | £10,600-£42,385 | £42,386-£100,000 | £29,403 |
| £102,000 | £9,600 | £9,600-£41,385 | £41,386-£102,000 | £30,603 |
| £104,000 | £8,600 | £8,600-£40,385 | £40,386-£104,000 | £31,803 |
| £106,000 | £7,600 | £7,600-£39,385 | £39,386-£106,000 | £33,003 |
| £108,000 | £6,600 | £6,600-£38,385 | £38,386-£108,000 | £34,203 |
| £110,000 | £5,600 | £5,600-£37,385 | £37,386-£110,000 | £35,403 |
| £112,000 | £4,600 | £4,600-£36,385 | £36,386-£112,000 | £36,603 |
| £114,000 | £3,600 | £3,600-£35,385 | £35,386-£114,000 | £37,803 |
| £116,000 | £2,600 | £2,600-£34,385 | £34,386-£116,000 | £39,003 |
| £118,000 | £1,600 | £1,600-£33,385 | £33,386-£118,000 | £40,203 |
| £120,000 | £600 | £600-£32,385 | £32,386-£120,000 | £41,403 |
| £121,200 | £0 | £0-£31,785 | £31,786-£121,200 | £42,123 |
Please note that these figures are purely theoretical and may not apply to your own personal tax circumstances as there may be other factors affecting your personal allowances and taxable income. This is just intended as a basic guide to illustrate how the personal allowance decreases after your earnings exceed £100,000.
Please take financial advice if you are in any doubt about your own personal tax circumstances.
E&OE