The loss of an individuals personal allowance (for earners over £100,000) should increase each year with inflation.

[Itsthedifference]

If the personal allowance is raised from £12,570 to £20,000 (Great):

Then, by the same justification, shouldn’t the £100,000 “cap” be raised?
(Where an individuals personal allowance is reduced by £1 for every £2 of income earned over £100,000)

Surely the loss of your personal allowance should be increasing each year with inflation. Yet it’s been the same since 2010.

£100,000 is not worth the same as what it was in 2010.

This policy was ill thought out and unfair.

Oh it’s too early for this 😆

😂😂Yes maybe. But I read a headline and it annoyed me

Yes I agree, even though I earn nowhere near that it just seems like common sense.

People benefitting from the former will include those earning over £100,000 though won't it? So I don't necessarily think so. £100,000 is a huge salary. It's not breadline - although I do think it's the superrich that should be paying more which it obviously isn't.

Well, I think the personal allowance should be raised to £24k for everyone and everyone with income over that should pay flat-rate tax @20% like the Swiss model. Increasing the personal allowance should also cut a significant amount of spending on benefits.
In addtiton, the personal allowance should be transferable between spouses and those in civil partnerships, so £48k p.a. per couple before any tax is payable. Surely that would decrease childcare costs as 1 partner could stay at home?
The only downside is that businesses and landlords would probably adjust their pricing on the assumption that everyone had a certain amount of money a ailable.

Agree. Ridiculous. Stifles ambition. I know several late 40s professionals who get to that threshold and then down tools including consultant doctors. They are basically being asked to do stressful hard jobs for tiny remuneration if they earn above that.. Three day week and golf course it is then. Not great for economy (or NHS)

Roughly 4% of people earn this according to google.

I work in the NHS and we don't have a single part time consultant in our department!

No, when you get £100k you lose the tax free allowance element. It also affects the entitlement to free childcare hours, which means for some the more they earn they less they actually get.

I find it very hard to care - apologies.

source?

So they don't get any tax free earnings at all? Not the first £12570? well I didn't know that and I agree that doesn't seem on.

No because individuals that earn over £100,000 will lose this tax free personal allowance. Therefore, actually they will be even worse off.

The following sounds far fetched but I’m trying to explain my point:
£100,000 in 2025 Is not equivalent to £100,000 in 2010 (when it was introduced). If this policy is kept indefinitely then £100,000 at some point in the future could be minimum wage. (With inflation). Therefore those on minimum wage will lose their personal allowance. Which obviously does not make sense. So when will the policy be changed?

ok far fetched but it gets my point across. In another 15 years inflation will mean that £100,000 is worth far less.

It’s on a taper so for every £2 you earn over 100k you lose £1 in tax free allowance so once you get your £125k you have no tax free earnjngs.

No because once you start earning over 100k, you start losing your tax allowance. So one day, when we all earn over that ( a long way off), there won’t be a tax allowance.

I honestly never knew this. I do think that's a bit wrong. I thought everyone got the first bit of their earnings tax free. I didn't think anyone could change my views on people earning £100,000+ 'complaining' (can't think of a better word) but you actually kind of have!

Also indirectly has an impact on the progression of women into senior job roles. I work in HR and know of a couple of people who have turned down roles as they are single parents with nursery age kids, the salary increase wasn’t enough to offset what they would lose

It’s bad for everyone because that cohort will reduce their hours and will then pay less tax that is supposed to support everyone else. Extremely de motivating.

Especially when your job is stressful so if you mess up (doctor / solicitor) you can actually ruin someone’s life. Doing more of that basically for free? Sod that.

I’m in this bracket and can happily agree it’s bonkers. When I got to £100k I put more in my pension and then realised it made more sense to go part time and reduce my salary entirely. This was because I had kids in childcare too, so not only was my marginal tax on each £1 above £100k 62%, it equated to much more as I wasn’t entitled to 30hours funded childcare which is worth £1000s. Also lost entitlement to tax free childcare scheme too. Even more annoying, I’m the only high earner in the family as DH is a basic rate payer. Yet a couple both earning £99,999 can access all these things (still have full personal allowance, childcare hours, tax free childcare) and their household income is much much more than ours !?

make it make sense!

if the cliff edge didn’t exist, I’d never have reduced salary and gone part time or contributed more to pension to stay under £100k. HMRC could have had 40% of all that…

By that logic the personal allowance should also increase with inflation, and so should the thresholds for the other tax bands. It’s not an oversight that they don’t; it’s the strategy of successive governments to raise tax revenues.

It's common in surgeons, my husband is a surgeon and most, if not all, of his colleagues are.

Yes, Im unaffected as I earn way below this, but I've several friends in a similar position.

I don't really think the highest earning 5% are really our top priority at the moment.

You mentioned reading a headline op about this, what paper?