Hello and welcome to the site. Thank you for your question.Your personal allowance of £10,500 is reduced if net income exceeds £26,100. Your allowance would go down by £1 for every £2 that your adjusted net income exceeds this threshold.Your earnings were £34,611 and they are (34,611-26,100) £8,511 over the threshold to avail higher personal allowance. This would trigger the reduction of £1 for every £2 over £26,100. Maximum reduction in personal allowance (10,500-9,440) £1,060It is for this reason that your personal allowance has been reduced to Basic allowance of £9,440.More information on personal allowances is covered here
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