Ndubuisi 'Andy' Egwim explains how UK doctors earning over £100,000 lose their personal allowance, creating an effective 60% tax rate. For every £2 earned above £100k, the £12,570 allowance shrinks by £1. The allowance vanishes entirely at £125,140, hitting consultants, GPs, and SAS doctors hardest.
Basically, everyone has a personal allowance which is tax-free and it's £12,570, right? And as a higher-rate taxpayer, if you are earning above £50,271, you're already paying 40% tax, okay? But you have this £12,570 that is tax-free. So by the time you hit £100K in adjusted net income, now for every £2— and most doctors get there, right? If you're a doctor, you become a consultant or a GP or a SAS If you're working a full-time equivalent, you're going to hit that £100K. And for most of us living in medicine for so long, and it's quite a well-deserved salary, maybe even better. But you get that £100K and the government says, hang on, you're doing too well now. For every £2 above £100K, you lose £1 from that £12,570. And by the time you hit £125,140, now you've lost the entire £12,570 and your effective tax rate is 60%.
