Understanding the UK Tax System: Key Considerations for High-Income Professionals

Why earning more doesn’t always mean keeping more.

The 60% Trap Explained:

Loss of personal allowance = effective 60% tax rate between £100,000 and £125,140.

Example: An employment lawyer earning £110k could use salary sacrifice to bring taxable income below £100k.

Strategies to Mitigate High Tax Rates:

• Pension contributions (double tax advantage).

• Salary sacrifice schemes (childcare, cycle-to-work).

• Gift Aid donations.

• Timing bonuses into new tax years.

Smart tax planning isn't about loopholes—it's about strategy.

"Up to 78% of high earners are not fully utilising pension allowances."

Source: AJ Bell, 2023

This article is for information purposes and does not constitute financial advice. The value of pensions can fall as well as rise. You may not get back the full amount invested. Taxation depends upon personal circumstances, and may change in future. Salary sacrifice is not suitable for all employees. Employees’ pre-tax salary will be reduced.