Check what your income level changes: your tax-free Personal Allowance, your Child Benefit, and your Tax-Free Childcare.
The legal line: Optimisation is using the law accurately with records. Evasion is hiding income, lying, sham arrangements, fake residence, false invoices, or pretending personal spending is business. TaxSorted explains the system; it does not help anyone evade tax.
Personal allowance
£12,570
Then tapers after £100k adjusted net income.
ISA allowance
£20,000
A legal wrapper, not a magic loophole.
CGT annual exemption
£3,000
Tiny compared with the asset game.
Private — runs in your browser
Your adjusted net income (ANI) is your income after certain deductions, like pension payments and Gift Aid. It decides three things: your tax-free Personal Allowance, whether you repay Child Benefit, and Tax-Free Childcare. Nothing you type is sent, saved or submitted.
2026/27 tax year · 6 April 2026 to 5 April 2027
Money earned as pay and money made as a capital gain follow different rules.
£80k as employment income
£19,432
Income Tax only · effective 24%
£80k as capital gain
£16,218
Capital Gains Tax (CGT) only · effective 20%
Difference
£3,214
Not magic. Different rules.
At £110k, the teaching engine shows £5,000 of personal allowance lost. The marginal Income Tax-only rate in this band is about 60% — before National Insurance or student loan effects.
The engine looks at ANI pressure points and suggests lawful moves, with their limits. No hiding income, no sham invoices, no pretend residence.
£70k + 2 children
£1,191
Estimated High Income Child Benefit Charge (HICBC) at 50% clawback; first move targets £60,000 ANI.
£112k income
£6,000
Personal Allowance lost; suggested gross ANI reduction £12,000.
The loud fight is about tax rates. The quiet machinery is frozen allowances, clawbacks, and who gets to choose their timing.
Freezing allowances and thresholds can raise tax without raising headline rates: inflation/wage growth pulls more people into tax or higher bands.
Why it matters: It is politically quieter than saying 'we raised Income Tax', but it changes who pays and how much.
The system is full of thresholds: £60k/£80k Child Benefit charge, £100k Personal Allowance taper, pension taper and allowance traps.
Why it matters: People with advisers can plan around thresholds; people without advice often only notice after payroll or Self Assessment bites.
Tax planning often comes from choice: when to realise gains, whether to use a wrapper, how to structure work, and whether income can be deferred or sacrificed.
Why it matters: The more control someone has over timing and form, the more legal planning tools they can use.
TaxSorted playground
Learn the allowances, traps and political moves that shape your payslip. Use the rules fully; never fake the facts.
Language
English · English
Use the globe switcher above to change the whole site.
No tax evasion. No fake invoices. No hidden income. Everything here is legal and explained in plain words.
The first slice of income can be tax-free — but the shield melts after £100k adjusted net income.
Play: work out pension or Gift Aid payments before a bonus is paid, not after tax has been taken.
Clean line: Use real contributions and records only.
A boring wrapper that can make future interest, dividends and gains much less annoying.
Play: move savings into the ISA early, before the growth builds up.
Clean line: Stay within ISA rules and annual limits.
The charge follows adjusted net income exactly as the rules define it — not how fair it feels at home.
Play: check who has the higher adjusted net income before making claim/repayment choices.
Clean line: Do not stop claims blindly; National Insurance credits can matter.
When thresholds freeze while wages/prices rise, more income gets pulled into tax without a headline rate rise.
Why politics matters: It is a tax rise most people never see announced — it arrives slowly, through frozen numbers.
Move: know your marginal band before bonuses, pay rises and pension decisions.
Income Tax, National Insurance and VAT are the giant receipts machines. That is why tiny threshold changes matter.
Why politics matters: Tax politics is not only rates; it is what base gets squeezed and who notices.
Move: read policy through receipts: who pays, who collects, who can move?
Announcements become law through resolutions, Finance Bills, amendments and HMRC guidance.
Why politics matters: Between speech and law, detail moves. That is where politics, lobbying and drafting matter.
Move: treat Budget day as a weather alert; wait for legislation before filing strategy.
The £100k trap: effective 60% Income Tax-only band before NI/student loans.
How it works: Between £100,000 and about £125,140 adjusted net income, the personal allowance is withdrawn £1 for every £2 over the threshold. That makes an extra £1 of income expose extra taxable income, producing an effective marginal rate around 60% before National Insurance or student loan effects.
Who can play hard: High earners with control over pension contributions, gift aid timing, salary sacrifice, bonus timing or company/director remuneration.
Your counter-move: If you are near £100k, learn adjusted net income. Pension contributions and Gift Aid can sometimes restore allowance, but cashflow and annual allowance matter.
The legal line: Legit: real pension/Gift Aid/salary-sacrifice arrangements documented properly. Not legit: fake donations, backdated documents, or hiding income.
Work income and capital gains run through different lanes; ownership often has timing choices wages do not.
How it works: Employment income can hit 40%/45% Income Tax plus National Insurance, while capital gains are taxed under separate CGT rules, with an annual exempt amount and rates that can be lower depending on asset and income band.
Who can play hard: People with investable assets, company shares, property or carried interests who can choose when and how gains are realised.
Your counter-move: Understand the difference, use lawful wrappers like ISA/pension where suitable, and keep basis/acquisition records so gains are not guessed later.
The legal line: Legit: planning disposals and using allowances. Not legit: hiding disposals, understating sale proceeds, inventing acquisition costs.
ISA is a simple legal wrapper: boring, powerful, unequal in practice because spare cash matters.
How it works: Within ISA rules, eligible savings/investments can grow free of UK Income Tax and CGT. The wrapper is simple and legal, but the biggest benefit goes to people who can afford to fill allowances consistently.
Who can play hard: People with spare cash/investments who can use the allowance every year and leave growth compounding.
Your counter-move: If you save or invest, check whether an ISA is appropriate before using a taxable account. Even partial use can reduce future paperwork.
The legal line: Legit: using authorised ISA accounts within annual rules. Not legit: breaching subscription rules or misdescribing account status.
Residence is a tax lever: the old non-dom remittance basis became a residence-based FIG regime from April 2025.
How it works: From 6 April 2025, the remittance basis was replaced by a residence-based regime for foreign income and gains. Qualifying new UK residents may receive a four-year FIG regime; long-term globally mobile people still need residence/treaty planning.
Who can play hard: Internationally mobile high-net-worth people with foreign income/gains, advisers and ability to choose where/when they become resident.
Your counter-move: If you move to/from the UK, do not guess residence. Read the official rules and get advice before arrival/disposal/remittance decisions.
The legal line: Legit: accurate residence and FIG claims. Not legit: fake residence, undeclared remittances, or pretending funds were clean without records.
Founder exits can have their own CGT lane if BADR conditions are met; eligibility matters before the sale, not after.
How it works: BADR can reduce CGT on qualifying business disposals up to a lifetime limit. The rate was 10%, rose to 14% from 6 April 2025, and rises to 18% from 6 April 2026 under current GOV.UK guidance.
Who can play hard: Business owners/founders with qualifying shares or business assets and the ability to structure a disposal around eligibility rules.
Your counter-move: If you own a business, know the conditions early. If you do not, understand that some tax breaks attach to ownership exits, not wages.
The legal line: Legit: meeting the conditions for qualifying assets/shares. Not legit: papering over ownership, officer, employee or trading conditions after the fact.
IHT is a timing-and-records game: real gifts, honest valuations, wills and thresholds matter years before death.
How it works: Inheritance Tax uses thresholds, rates, exemptions, gifts and residence/nil-rate rules. Larger estates can plan transfers, gifts and structures around timing and documentation.
Who can play hard: Families with estates above thresholds, property, trusts, advisers and time to plan years ahead.
Your counter-move: Keep records of gifts, wills and estate values. If a home or family transfer is involved, check the official thresholds before assuming nothing matters.
The legal line: Legit: real gifts and honest valuation/reporting. Not legit: sham ownership, hidden assets, or pretending control was given up when it was not.
Pensions are retirement first and tax timing second: powerful near cliffs, but annual allowance and taper rules bite.
How it works: Pension contributions can receive tax relief and can reduce adjusted net income, which matters for thresholds such as the £100k personal allowance taper. Annual allowance, taper and carry-forward rules limit the play.
Who can play hard: Higher earners with cashflow and pension headroom, especially those near threshold cliffs.
Your counter-move: Learn the annual allowance before contributing large amounts. Use pensions for retirement first, tax optimisation second.
The legal line: Legit: real pension contributions within rules. Not legit: circular/fake arrangements or ignoring annual allowance/taper charges.
Every spicy claim has a receipt and a boundary.
Supports: UK personal allowance and Income Tax bands/rates for England, Wales and Northern Ireland. The personal allowance is reduced by £1 for every £2 of adjusted net income over £100,000.
Does not prove: Scottish income tax rates for non-savings/non-dividend income. That a specific person has no other allowances, reliefs or tapered effects.
Supports: Capital gains rates can differ from Income Tax rates. Current annual exempt amount and rates depend on asset type and income band.
Does not prove: That a disposal qualifies for a particular relief. That losses or residence rules are fully accounted for.
Supports: The former remittance basis for non-domiciled individuals was replaced by a residence-based foreign income and gains regime from 6 April 2025. The new four-year FIG regime can provide relief for qualifying new UK residents.
Does not prove: That every internationally mobile person qualifies. That treaty, remittance, trust or transitional rules are simple.
Supports: Business Asset Disposal Relief can reduce the CGT rate on qualifying business disposals up to a lifetime limit. Rates changed from 6 April 2025 and 6 April 2026.
Does not prove: That a specific shareholding, office-holder status or trading company condition is satisfied. That all business sales qualify.
Supports: Savings interest can be covered by starting rate, personal savings allowance, ISA sheltering or taxed otherwise.
Does not prove: That a particular account is an ISA or that the person has unused allowance.
Supports: ISAs shelter eligible savings/investments from UK Income Tax and Capital Gains Tax within subscription rules.
Does not prove: That ISA sheltering benefits everyone equally. That the visitor can or should use the full annual allowance.
Supports: Inheritance Tax has thresholds, exemptions and rates that make estate planning highly threshold-sensitive.
Does not prove: That an estate owes IHT or that a gift is exempt without facts.
Supports: Pension tax relief and annual allowance rules can make pension contributions a major planning lever.
Does not prove: That a specific contribution is advisable or within allowance after taper/carry-forward rules.
Supports: Fiscal drag describes frozen or slow-rising thresholds pulling more people into tax or higher rates as incomes rise.
Does not prove: That any specific individual owes more tax without running their figures.
Supports: Frozen or reduced personal-tax thresholds raise receipts by bringing more people into tax and higher rates as nominal incomes rise.
Does not prove: That fiscal drag is illegal or avoidable by artificial steps.
Supports: The High Income Child Benefit Charge threshold and clawback mechanics.
Does not prove: That a household should stop claiming Child Benefit without considering NI credits.