Cookies are small text files that are stored on your computer when you visit a website. They are mainly used as a way of improving the website functionalities or to provide more advanced statistical data.
High earners actively avoiding crossing the £100k income threshold
Newsletter issue – March 2026
According to the Chartered Management Institute, 43% of managers say they or their employees have taken steps to keep income below £100k. This behaviour is driven by the steep tax consequences that kick in once earnings exceed that level.
This is known as the '£100,000 tax trap'. Once income exceeds this, families lose access to tax-free childcare worth up to £2,000 per child and 30 hours of free childcare, worth up to £7,500 per child per year. In addition, the personal allowance tapers away between £100,000 and £125,140, creating an effective marginal tax rate of 62% (and 69.5% in Scotland).
To mitigate this, it was found that workers are responding as follows:
27% increased pension contributions to reduce taxable income.
24% used salary-sacrifice schemes (though these will be capped from 2029).
15% reduced hours or went part-time.
9% turned down promotions.
8% retired early.
6% donated to charity to stay below the threshold.
It is argued that this causes wider economic concerns, such as discouraging extra work, especially among doctors. Experts argue the threshold is 'irrational' and harmful to productivity.
What our clients say about us...
"Paul has provided accountancy services to my company for 2 years now. I can recommend Paul very highly; his skills as an accountant are highly detailed and professional and he is always available to provide advice. One aspect of the way Paul works that I greatly appreciate is a preference to meet face to face when there is a detailed conversation to be had. I personally find this more productive and is a benefit of working with a small accountancy firm that you wouldn't get with the large faceless providers."
ALISTAIR FAIRWEATHER - PROGRAMME & PROJECT MANAGER, DELIVERING/RESCUING I.T. 7 BUSINESS CHANGE WITH BUDGETS UPTO £50M INC SUPPIER MANAGEMENT
"I couldn't ask for more from Paul as an Accountant. Paul has been accountant to Work Relief Charity Recruitment for just over a year now and is proving an invaluable asset. Accurate, knowledgeable, flexible with an emphasis on service delivery, I would recommend Paul's services to any organisation looking for an accounts professional."
Neil Price - Managing Director at Work Relief Charity Recruitment
"Paul was a referral from a family member when I started my business 2 years ago. As this was the first time I had ever run my own company I was totally clueless over the financial side of matters and was worried that I may have made mistakes in any of my accounting. I needn't have worried as after enaging Paul for a set monthly fee he was always there on the end of the phone for all sorts of questions I had and no matter how trivial they were Paul gave me all the information I required and more and did an excellent and painless job at the end of my first year! Couldn't ask for any better to be honest. Just two words - hire him!!!"
Lee Westrap MBCS - Director - Bulldog IT Services
Please complete our form
to request a callback
Competitive fixed quotes
for agreed services
Increase your profit and
reduce tax liabilities
Expert advice for your
business size
