Income up to the value of the Personal Allowance is tax-free, but any unused personal allowance cannot be carried forward to the next tax year, so the message is “use it or lose it”. In 2015/16 every taxpayer has a personal allowance of £10,600.
The allowance is reduced by £1 for every £2 of income over £100,000, and is lost when income exceeds £121,200. Income between £100,000 and £121,200 is effectively taxed at 60%. However, making pension contributions will reduce the income on which tax is calculated.