Tax changes for high earners

In the March 2010 Budget, Chancellor Alastair Darling confirmed measures that will hit anybody who earns more than £100,000.

From April 2010, changes to the personal allowance, in conjunction with the introduction of a new higher rate tax band, are likely to cost even those near the bottom of these earnings levels an extra £2,500 a year.

Furthermore, these measures were accompanied by a move to limit tax relief on pension contributions, which could add to the impact for those earning more than £130,000.

Targeting high earners

The measures are designed to see those who earn more contribute more to the repayment of the UK’s extraordinary debt levels. They include:

 -     a reduction in the personal income tax allowance for those earning more than £100,000;

-     a new 50% income tax band for those earning more than £150,000;

-     limitiations on the tax rebates available on pension contributions

Taken together, these measures mean high earners need to start thinking now about how to mitigate some of the impact. There are a number of things that can be done to help but, with time running short, you should start thinking now to make the most of this opportunity.

Getting help

If you would like to find out more about the measures and start making plans to limit their effects, we can help.

Whether it is through pension planning, investment advice or simply assessing your salary level and tax position, we will take a close look at your financial situation and recommend solutions tailored entirely to your needs.