HMRC alert: £100k tax trap 'puts the brakes' on Britons' careers as thousands face 71% charge

The infamous £100,000 tax trap is resulting in thousands of young Britons putting the brakes on their careers to avoid a 71 per cent charge from HM Revenue and Customs (HMRC), new research indicates.Research from wealth manager Killik Co reveals that more than one in five high earners believe the £100,000 tax trap is harming their professional advancement.The study, which surveyed 2,000 individuals earning six-figure salaries, found that 10 per cent of respondents had contemplated cutting their working hours to bring their income below the threshold.Meanwhile, 17 per cent indicated they would turn down a salary increase or promotion to avoid crossing the £100,000 mark.The findings also showed that over a quarter of young workers between 18 and 24 reported that tax considerations had dampened their career ambitions.Workers who breach £100,000 threshold face a sizable HMRC bill, with their tax-free personal allowance gradually withdrawn while simultaneously losing access to Government-subsidised childcare.This combined effect means workers can face an effective marginal tax rate of 62 per cent on earnings between £100,000 and £125,140.For those still repaying student loans, the situation is even more punishing, with an additional nine per cent deducted from their income, pushing the total marginal rate to 71 per cent.LATEST DEVELOPMENTSState pension warning: HMRC issues letters to retirees with many 'unaware they owe tax'Labour rejects calls to give bereaved families more time to pay death taxes on pensionsStudent loans act as a 'lifelong tax blocking young from property ladder'Parents with children aged nine months to four years can receive up to 30 hours of free childcare weekly, but this entitlement disappears entirely once either parent's salary exceeds £100,000.Will Stevens, the head of Proposition Management at Killik Co, said the tax trap was actively discouraging workers from pursuing higher earnings.He said: This is leaving families under financial strain and in an unnecessarily difficult position.