Personal Tax changes for 2010/11
27/01/2010
With effect from 6th April 2010 major changes are taking place in relation to rates of tax, personal allowances and treatment of pension contributions.
In summary:
Top rate of Income Tax increases to 50% for taxable incomes over £150,000
For those with taxable income over £100,000 personal allowances are to to be clawed back. Allowances will be reduced by £1 for every £2 that their income exceeds £100,000 until the personal allowance is reduced to Nil. This will have the effect of creating an even greater effective rate on earnings over £150,000.
National Insurance goes up by a full 1% from April 2011.
It is interesting to note that the gap between Capital Gains Tax (18%) and Income Tax (50%) for high earners is now significant Tax planning opportunities may exist.