Tapered annual allowance on non-standard code

HermanG

(Unfortunately) more out of curiosity than applicability:

I read everywhere that if you earn over 100k your allowance is reduced by 2£ for every £1 you earn. So, if you are on the standard tax code (1275L) that works out to the allowance going to 0£ at c.£125k when the 45% tax band kicks in. 

My question is: what happens if you are not on the standard tax code, e.g. if you have decided to pay tax from previous years through your tax code and therefore you are on 900L or something similar? then your allowance goes to £0 at £118. what happens to the amount between 118 and 125k? Is that a loophole? 

Dazed_and_C0nfused

You've misunderstood a few things.

The standard tax code is 1257L, not 1275L.

It isn't your earnings which matters, it's adjusted net income.

The upper limit is currently £125,140.

If you had £0 Personal Allowance and other tax code adjustments then you would have a K code - negative tax code.

The 45% tax band doesn't apply at £125k

HermanG

Thank you. Though my question still stands: 
if you have a lower than the standard allowance what happens when that allowance gets to 0 and how is HRMC making up the difference? 

Though I think I found the answer in another thread. The tax code is for the in year calculation but in this case it will be recalculated when you submit the self-assessment 

sheramber

HermanG said:

Thank you. Though my question still stands: 
if you have a lower than the standard allowance what happens when that allowance gets to 0 and how is HRMC making up the difference? 

Though I think I found the answer in another thread. The tax code is for the in year calculation but in this case it will be recalculated when you submit the self-assessment 

As stated above 

If you had £0 Personal Allowance and other tax code adjustments then you would have a K code - negative tax code.