High Earners Tax could hit over 70%

Those who earn between £150,000 and £180,000 could be hit with an income tax rate of 71.5 per cent or more, from April 2011, if a raft of restrictions on the tax relief of pension contributions is introduced. Tax advisers are lobbying the government to modify some of its "draconian" proposals up for consultation. Mike Warburton, tax partner with accountants Grant Thornton, said some earners could be "in the ridiculous position of having an extra tax bill that is greater than their extra income". Another issue raised is how HM Revenue and Customs will treat the taxation of final-salary schemes. From 2011, the Revenue has indicated it will look to tax the increase in the pension pots of employees who receive a pay rise.

Source : Financial Times Money page 1 - 6.6.09.

06 Jun 2009


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