Earn over £100k? 5 strategies to avoid losing your personal allowance at tax year end

The personal allowance is the amount that you can earn free of income tax. It’s currently £12,570 a year, but if you earn over £100,000, the personal allowance starts to be restricted.

Where income from all sources exceeds £125,140 there is a full clawback of the personal allowance, so all your relevant income is liable to be taxed.

The effect of the personal allowance abatement is that income in the £100,000 - £125,140 band suffers tax at an effective rate of 60%. With this in mind here are 5 strategies to bring income down to £100,000 and avoid the personal allowance clawback.

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