The £100k Tax Trap in Numbers: 1.19 Million Taxpayers Now on £100k–£150k

Since April 2010, anyone whose adjusted net income goes over £100,000 has lost £1 of their tax-free personal allowance for every £2 above that line. The £100,000 figure has never been raised. The personal allowance itself (£12,570) and the higher-rate threshold (£50,270) have not moved since April 2021, and the government has now frozen them until 5 April 2031.

We brought together HMRC’s latest income tax statistics (published 15 July 2026), the Office for Budget Responsibility’s forecasts and ONS inflation data to measure two things: how many people the fixed £100,000 line now reaches, and what the freeze costs at nine salaries in 2026-27. Every figure comes from a named official table or is calculated from one, and the method and sources are set out in full below.

How many people the £100,000 line now reaches

HMRC groups taxpayers by total income before deductions. Its band closest to the taper is £100,000 to £150,000. That band contains the whole of the £100,000–£125,140 zone where the allowance is being withdrawn, plus people between £125,140 and £150,000 who have already lost all of it. HMRC does not publish a count for £100,000–£125,140 on its own, so neither do we.

The band has grown in every year since the taper began, from 319,000 in 2010-11 to a projected 1.19 million in 2026-27. On HMRC’s figures (projections from 2024-25) it grows by 527,000 between 2021-22 and 2026-27 — more than the 344,000 it added in the eleven years from 2010-11 to 2021-22. Because the £100,000 line is fixed in cash terms, any pay rise, including one that only keeps up with prices, can carry someone across it.

Adding HMRC’s bands from £100,000 upwards, 2.06 million taxpayers — 5.1% of all 40.8 million income tax payers, or one in 20 — are projected to have total income of £100,000 or more in 2026-27. In 2010-11 it was 588,000, or 1.9% (one in 53).

HMRC’s percentile table tells the same story. In 2010-11 the top 5% of taxpayers started at £62,600 of income and the top 1% at £140,000. For 2026-27 HMRC projects the top-5% line at £101,000. A rule that once touched roughly the top 2% of taxpayers now starts at almost exactly the point where the top 5% begins.

Table 1 below gives every value. HMRC counts are rounded. “£100k or more” is our sum of HMRC’s bands from £100,000 upwards (£100k–£150k, £150k–£200k, £200k–£500k, £500k–£1m, £1m–£2m, £2m+), so it may differ slightly from an unrounded total. “Total income” is income before deductions and allowances.

The line that has never moved

The taper sits in section 35(2) of the Income Tax Act 2007: where adjusted net income exceeds £100,000, the personal allowance “is reduced by one-half of the excess”. It was added by the Finance Act 2009 and has applied from the 2010-11 tax year. Section 57 of the same Act lists the amounts that rise each year with the consumer prices index unless Parliament decides otherwise. The personal allowance is on that list. The £100,000 limit is not.

Under the Act’s usual timing, a figure set for 2010-11 would be uprated by the change in CPI from September 2009, and the 2026-27 figure by CPI to September 2025. Over those sixteen years the ONS CPI index rose from 87.1 to 139.3, an increase of 59.9%. Uprated by that amount, the £100,000 line would stand at £159,931. Put the other way round, on CPI £100,000 in 2026-27 has the buying power of £62,527 in September 2009: the trap now starts at a real income 37.5% lower than when it was introduced.

The personal allowance did rise with CPI to £12,570 for 2021-22. It has been frozen there since April 2022, and in November 2025 the government confirmed that the allowance, the £37,700 basic rate limit (which gives the £50,270 higher-rate threshold) and the matching National Insurance thresholds will stay where they are until 5 April 2031. The OBR notes that the additional-rate threshold, cut from £150,000 to £125,140 in April 2023 to line up with the end of the taper, is frozen to 2030-31 as well.

Inside the trap: 62p of every extra pound

Between £100,000 and £125,140 each extra pound is taxed at 40%. It also removes 50p of tax-free allowance, and that 50p is then taxed at 40% too — another 20p. Add 2% National Insurance and 62p of the pound goes in tax. Above £125,140 the allowance has gone and the rate falls back to 47p: 45% income tax plus 2% NI.

In cash terms, a £10,000 pay rise from £100,000 to £110,000 adds £3,800 to take-home pay in 2026-27. The other £6,200 goes in income tax and National Insurance.

The childcare cliff at £100,000

The same £100,000 figure switches off two childcare schemes that use the adjusted-net-income test. Tax-Free Childcare adds £2 for every £8 a parent pays in, up to £500 every 3 months per child (£2,000 a year), or £1,000 every 3 months (£4,000 a year) for a disabled child. In England, working parents of children aged 9 months to 4 years can also get 30 hours a week of free childcare for 38 weeks of the year. Both stop if either parent’s expected adjusted net income for the tax year is over £100,000. Neither tapers.

What the freeze costs in 2026-27

To put a price on the freeze we compare 2026-27 income tax and employee National Insurance under the thresholds that actually apply with the thresholds the OBR says would apply had they kept rising with CPI since 2021-22. The OBR publishes that counterfactual in its March 2026 forecast.

CPI-linked figures: OBR, Economic and fiscal outlook, March 2026, detailed forecast tables (receipts), Table 3.19. The basic rate limit is the OBR’s higher-rate threshold minus its personal allowance. The additional-rate threshold has never been CPI-linked and is the same in both columns.

Salary only: income tax (England, Wales and Northern Ireland) and employee Class 1 NI, no pension contributions, student loan or other income. Rounded to the nearest pound, so columns may not subtract exactly. A negative NI figure means the freeze lowers NI.

For anyone on £75,000 to £125,000 the freeze adds £3,540 of income tax in 2026-27 and takes £876 off their National Insurance, a net cost of £2,664. The cost is flat across that range: both sets of thresholds sit below these salaries, and because the £100,000 taper point is the same in both, the allowance shrinks by the same amount in each. On £60,000 the cost is £2,038; at £150,000, where the allowance has gone in both cases, it is £1,264. Basic-rate taxpayers on £30,000 to £50,000 lose £676.

The National Insurance column runs the other way. The upper earnings limit is frozen at £50,270 as well, so more of any salary above that point is charged NI at 2% rather than 8%. And the primary threshold was raised to match the personal allowance in 2022, which leaves it £298 above its CPI-linked level. Both trim the net cost, but the income tax effect is far larger.

The freeze to 2031, in the OBR’s numbers

By 2030-31, the OBR expects a CPI-linked personal allowance would have reached £17,440 and a CPI-linked higher-rate threshold £70,140 — £4,870 and £19,870 above the frozen figures. Its latest estimate is that frozen thresholds, together with the lower additional-rate threshold, will have moved 5.39 million people into the higher or additional rate and brought 6.14 million into income tax altogether. In November 2025 it put the share of taxpayers paying the higher or additional rate at 15% in 2021-22, rising to 24% by 2030-31.

Source: OBR, Economic and fiscal outlook, March 2026, detailed forecast tables (receipts), Table 3.18. The OBR’s ‘CPI-linked’ case has the basic- and higher-rate thresholds rising with CPI from March 2021; the additional-rate rows compare the old £150,000 threshold with £125,140.

HMRC’s own count points the same way. It projects 8.99 million income tax payers at the higher or additional rate in 2026-27, 82% more than the 4.95 million in 2021-22, taking their share of all taxpayers from 15.0% to 22.0%.

Source: HMRC Income Tax liabilities statistics, Table 2.1. The additional-rate threshold fell from £150,000 to £125,140 in April 2023, which moved some higher-rate taxpayers into the additional rate; the total at 40% or 45% is not affected by that switch. Scottish taxpayers are classified by HMRC’s rules for Scottish bands.

Where the 40% taxpayers are

The biggest proportional rises are outside London and the South East. On HMRC’s indicative regional projections, the number of people paying 40% or 45% roughly doubles between 2021-22 and 2026-27 in much of the country, led by Wales (+117%), the West Midlands (+105%) and the North East (+102%). London, which already had the most higher-rate taxpayers, rises by 64%.

Source: HMRC Income Tax liabilities statistics, Table 2.2 (higher-rate plus additional-rate taxpayers). HMRC says its regional projections “should be regarded as indicative”. Scotland is left out because Scottish taxpayers pay Scottish rates on earnings and HMRC classifies them against different bands.

Bringing adjusted net income back to £100,000

The taper, Tax-Free Childcare and the free-hours offer all test adjusted net income, not salary. HMRC’s guidance says adjusted net income is worked out by taking off, among other things, the grossed-up value of Gift Aid donations and of pension contributions to which the provider has added basic-rate relief. Salary sacrifice works a step earlier: it is an agreement to reduce cash pay, so the sacrificed pay is never part of taxable income in the first place. Our salary sacrifice calculator shows what a sacrifice does to take-home pay, our guide to adjusted net income explains the calculation step by step, and our £100k tax trap explainer covers the options. This page is information, not financial advice.

Method

1. Taxpayer counts. HMRC, Income Tax liabilities statistics (published 15 July 2026): Table 2.5a for 2010-11 to 2022-23 and Table 2.5 for 2023-24 to 2026-27, band “£100,000” (total income £100,000 up to £150,000). 2023-24 is the latest outturn from the Survey of Personal Incomes; 2024-25 to 2026-27 are HMRC projections consistent with the OBR’s March 2026 forecast. Higher- and additional-rate counts: Table 2.1. Regions: Table 2.2. Percentile breakpoints: Table 2.4.
2. The £100,000 line in today’s prices. £100,000 × 139.3 ÷ 87.1, the ONS CPI index (series D7BT, 2015=100) for September 2025 over September 2009 — the Septembers that would set the 2026-27 and 2010-11 figures under the Act’s timing.
3. Marginal rates. Income tax (England, Wales and Northern Ireland) and employee Class 1 National Insurance at 2026-27 rates, computed by the site’s tax module on the next £1,000 of salary at the middle of each band.
4. Cost of the freeze. For each salary, 2026-27 income tax plus employee NI with the actual thresholds, minus the same with the OBR’s CPI-linked thresholds (Table 3.19): personal allowance £16,070, higher-rate threshold and upper earnings limit £64,470 (so a basic rate limit of £48,400), primary threshold £12,272. Rates, the £100,000 taper point and the £125,140 additional-rate threshold are the same in both.
5. Cross-check. Applying the Act’s own rules to the ONS September CPI rates (3.1%, 10.1%, 6.7%, 1.7%, 3.8% for September 2021 to 2025; round up to the next £10 for the allowance and £100 for the basic rate limit) gives a 2026-27 allowance of £16,080 and basic rate limit of £48,400 — the same basic rate limit as the OBR and an allowance £10 higher. Using our figures instead of the OBR’s would change no cost in Table 4 by more than £4.

Limitations

• No official count exists for adjusted net income between £100,000 and £125,140. HMRC’s bands use total income before deductions, which can be higher than adjusted net income (pension contributions and Gift Aid reduce the latter), so the count of people with total income of £100,000 or more is an upper bound on the number losing some of their allowance.
• Figures for 2024-25 to 2026-27 are projections and will be revised when HMRC publishes outturn data (next edition expected May/June 2027). HMRC describes its regional projections as indicative.
• The calculations use income tax rates for England, Wales and Northern Ireland. Scotland sets its own rates on earnings; Scottish taxpayers have the same £12,570 personal allowance and also lose it entirely above £125,140.
• Table 4 covers salary only — no pension contributions, student loan, benefits in kind, savings or dividends — and one year, 2026-27, not the cumulative cost since 2022-23.
• The CPI-linked case is hypothetical. It assumes thresholds would have been uprated every year and that pay and rates would have been no different.
• We could not find an official £ value for the free childcare hours, or an official count of families who lose Tax-Free Childcare at £100,000, so the page gives neither.

Sources

1. HMRC, Income Tax liabilities statistics: tax year 2023 to 2024 to tax year 2026 to 2027, published 15 July 2026 — Tables 2.1, 2.2, 2.4 (collated tables, ODS).
2. HMRC, Table 2.5: Income Tax liabilities by income range (2023-24 to 2026-27).
3. HMRC, Table 2.5a: Income Tax liabilities by income range for historic years (1999-00 to 2022-23).
4. OBR, Economic and fiscal outlook – March 2026, detailed forecast tables: receipts, Tables 3.18 and 3.19.
5. OBR, Economic and fiscal outlook – November 2025, paragraph 3.29 and Box 3.3.
6. ONS, CPI index 00: all items (D7BT) and CPI annual rate (D7G7), release of 16 September 2026.
7. HMRC, Maintaining Income Tax and equivalent National Insurance contributions thresholds until 5 April 2031, 26 November 2025.
8. Legislation: Income Tax Act 2007, s.35, s.57 and s.21; Finance Act 2009, s.4.
9. GOV.UK: Income over £100,000; Rates and thresholds for employers 2026 to 2027; Scottish Income Tax.
10. GOV.UK: Tax-Free Childcare and eligibility; Free childcare if you’re working.
11. GOV.UK: Adjusted net income; Salary sacrifice and the effects on PAYE.

Contains public sector information licensed under the Open Government Licence v3.0.

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