THE 50p TOP rate of tax (on income in excess of £150,000) will raise an additional £12.6bn over five years, according to the Treasury’s own figures. There has also been much speculation in the press that the rate will be scrapped with many high profile economists calling for it to be scrapped.
The Chancellor has previously claimed that the tax rate was a temporary measure. However, he has indicated a final decision will be made following the self-assessment deadline in January 2012 when the matter will be reviewed.
Whilst the 50p rate may be scrapped it could be a fact of life for a number of years and 6 months into the current tax year is a good time to review income and consider planning to minimise exposure to the 50% rate in the current year.
Individuals should be thinking now about issues including:
- Remuneration planning to stay below the £150,000 level
- Maximising pension contributions within the new limits to obtain relief at 50% now.
Get in touch with your MHA Broomfield Alexander contact or email [email protected] to discuss your individual circumstances.