Legislation included in F(No. 2)A 2015 provides for a tapered reduction of the annual allowance for 'high-income individuals' that applies for 2016–17 and subsequent years. The taper works by reducing the annual allowance for the year by an amount given by the following formula (which, given the annual allowance for 2016–17 to 2019–20 is £40,000, has the effect of reducing the allowance by £1 for every £2 by which income exceeds £150,000):

(T - £150,000) x (A - £10,000/£60,000)

Where T is the individual's adjusted income for the year and A is the annual allowance for the year.

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