Let's start with the question I like to ask people. What's the highest tax rate in the UK?
Almost everyone says 45%. The real answer, for a specific stretch of income, is 60%, or 62% once you count National Insurance. Very few people realise this, even though a large number of them are affected by it, roughly 1.2 million workers. When I tell people the actual number, most of them are genuinely shocked. There's something about handing over more than half of what you earn that hits differently to seeing a tax band on a table. Despite that reaction, very few people go on to actually do anything about it.
There's no official "60% band." You won't find it named anywhere on a tax return. It's what happens when your personal allowance tapers away, £1 lost for every £2 you earn above £100,000, until it's gone completely at £125,140. That taper sits on top of the standard 40% higher rate, and the combination is what creates the 60%. You're effectively taxed twice on the same money: once at the regular 40% rate, and again through the personal allowance you lose as a result of earning it.
Here's what that looks like on £100 of extra income, earned somewhere between £100,000 and £125,140:
This is usually where people switch off. Most people benchmark against their base salary, so if that's comfortably under £100k, they assume they're fine. The problem is that "income" for this calculation isn't just your salary. It's your adjusted net income, and that pulls in things people don't naturally think to count:
So someone on an £80k–£90k base salary, who genuinely believes this doesn't apply to them, can get pulled straight into this band by a single large RSU vesting event, or by something as modest as £1,000 a month in rental income. Neither of those feels like a dramatic change in circumstances. Both are enough to tip you over.
It's also getting more common, not less. Tax thresholds have been frozen for years, and they're set to stay frozen until at least April 2031, while wages keep rising. That's fiscal drag: your salary might just be keeping pace with inflation, not actually growing in real terms, and you can still get pushed into this band anyway. Roughly 1.2 million people are in it right now, and that number only moves in one direction while the freeze holds.
I'll add one more thing here briefly, even though it really deserves its own post. There's a second £100k threshold worth knowing about, and it doesn't work like a taper at all. Tax-free childcare and the 30 free hours aren't gradually withdrawn the way the personal allowance is. They're lost entirely the moment your adjusted net income crosses £100k, even by £1. For a parent with young kids, that cliff edge can be worth more than £10,000 a year, a bigger hit than the marginal tax rate itself. It catches enough people off guard that there are entire forums full of people venting about finding out the hard way.
Once you understand the mechanics, the fix is simple to state, even if it takes a bit of work to apply: bring your adjusted net income back below £100k. A few levers actually do that.
Pension contributions. The best option is usually salary sacrifice through your employer, or a personal SIPP if that's not offered. A lot of employers will let you sacrifice a bonus or RSU payout into your pension, partially or in full, which is worth asking about directly. You can use the same lever for other income too, moving a similar amount from rental income into your pension to offset it. You lose immediate access to the money, but you save the tax on it.
Salary-sacrifice benefit schemes. If your workplace offers something like cycle to work or an EV scheme, that also reduces your net income. Worth saying plainly: don't do this purely to dodge tax. It's only worth it for something you'd buy anyway. And check the numbers before you commit, some EV salary sacrifice schemes have quietly gotten less generous over time, to the point where buying off-market can work out better.
Supporting a charity. Donations to recognised charities are deductible from your income. If you're already supporting a cause, this gets you an additional benefit for money you were going to give regardless, which means you can afford to give a bit more for the same real cost to you.
Timing your earnings. If you have any control over when income lands, usually the case if you're self-employed or a company director, you can spread it across tax years. Deferring a bonus, or spreading self-employed or dividend income, are common examples. It's a genuinely complex area though, and worth a conversation with your accountant rather than doing it on instinct.
Sharing with your partner. If your partner is in a lower tax band, or nowhere near the £100k threshold themselves, it may be possible to move some income, rental income is the common example, into their name instead.
Work out your actual adjusted net income: bonus, rental, RSUs, savings interest, everything, not just your base salary. That number is what decides whether any of this applies to you, and which lever is worth using.
Most people fall into this trap because the income that pushes them over the line lives in different places: a bonus in payroll, rental income in a landlord account, RSUs sitting in a broker, savings interest nobody adds up until January. Gild gives you visibility across all of it in one place, so you can see this coming before your tax return tells you about it, not after.
Everything in one place: your banks, pensions, investments, and goals.
🔒 Your data, never sold. Always protected.