60% Tax Trap_ How Doctors Lose £1 for Every £2 Earned!
In this segment, Ndubuisi 'Andy' Egwim explains the UK "60% tax trap" that affects many doctors, consultants, GPs, and other medical professionals who earn between roughly £100,000 and £125,000‑£140,000. He details how the personal allowance is withdrawn at a rate of £1 for every £2 earned above £100k, which, when combined with the standard 40% income tax, creates an effective marginal tax rate of about 60% on each additional pound earned. Using a simple example, Andy shows that for every £100 earned, only £40 remains after tax. He then contrasts two ways to deploy that £40: placing it in a tax‑efficient ISA, where it can compound and grow, versus investing it in a Self‑Invested Pension (SIP), highlighting three notable outcomes of the latter. The talk aims to raise awareness of this hidden tax burden and to prompt doctors to consider smarter post‑tax investment strategies.
