Instead the Financial Times report says that the 50% tax levied on bonuses over £25,000 is more likely to bring in a more welcoming £2.5billion to the government, after a survey conducted through the UK banks.

While the Treasury could not confirm the Financial Times figures the much needed extra cash would help to payoff some of the Governments record budget deficit and help the UK on the road to financial recovery.

Personal Allowances 2009-10

These remain as announced in the Pre-Budget report November 2008. From the 6 April 2009 the income tax personal and age related allowances are increased to:

Age under 65 – £6,475
Age 65 to 74 – £9,490
Age 75 and over – £9,640

The income limit for aged related allowances (over 65’s) is increased to £22,900.

Blind person’s allowance increased to £1,890.

Personal Allowances 2010-11

The basic personal allowance will be reduced for taxpayers who earn more than £100,000 per annum.

Where an individual’s income is above £100,000 the basic personal allowance will be reduced by £1 for every £2 their income exceeds £100,000.

Income Tax Rates 2009-10

Starting savings rate 10%* – £0 to £2,440

Basic rate 20% – £0 to £37,400

Higher rate 40% – Over £37,400

* There is a 10p starting rate for savings only. If an individual’s non savings taxable income exceeds the starting rate limit, the 10p starting rate for savings will not be available for savings income.

New 50% Income Tax Rates from 2010-11

From 6 April 2010 a new income tax rate of 50% will be applied to taxable income in excess of £150,000.

Capital Gains Tax 2009-10

The annual exempt amount for individuals is £10,100 (and for most trustees £5,050)

Inheritance Tax 2009-10

The individual IHT allowance is increased to £325,000.

Pensioners Taxback Campaign

From autumn 2009 HM Revenue & Customs will be targeting pensioners who receive the Pension Credit to help them reclaim tax they may have paid in error from bank or building society interest they have received.

ISA’s

2009-10 The ISA limit is increased to £10,200 (up to £5,100 can be saved in cash) restricted to people aged 50 or over.

2010-11 The limit is increased to the same level for all age groups.

Pensions – limiting tax relief at higher rates

From 6 April 2011 the Government intends to restrict tax relief for individuals with an annual income of £150,000 or more. Relief will be withdrawn gradually so that taxpayers earning over £180,000 will effectively achieve a 20% tax deduction, the same as a basic rate tax payer.

Additionally, from 22 April 2009, if the following conditions apply:

1. Your income is over £150,000

2. You make additional contributions in excess of your existing ongoing contributions, and

3. Your total pension contributions in the year exceed £20,000 (including contributions made by the employer).

Then any higher rate tax advantage, on additional contributions above the £20,000 limit, will be subject to a special annual allowance tax charge that will recover tax relief given at above basic rate.

Excise Duty increases

Alcohol Duty – From midnight 22 April alcohol duty will rise by 2%, equivalent to:

1p on a pint of beer
13p on a 75cl bottle of spirits
4p on a 75cl bottle of wine

Tobacco Duty – After 6pm 22 April tobacco duty will rise by 2% which will add 7p to a pack of 20 cigarettes.

Fuel Increases – Duty increases will add 2 pence per litre to the cost of unleaded petrol and diesel from 1 September 2009.

Stamp Duty Land Tax

The present exemption from SDLT of residential property sales up to £175,000 is to be extended to 31 December 2009. After this date the SDLT threshold will revert to £125,000 (£150,000 in disadvantaged areas).

The admission comes in a report by the Commons public accounts committee into the failure of Revenue & Customs to meet best business practise.

The report is scathing in its accusations that the Revenue & Customs does not have a user friendly website, fails to meet standards in answering calls, give incorrect information and have amassed 200,000 complaints in two years.

The report suggests that the self assessment of tax is not working and is need of overhaul.

David Gauke the shadow treasury minister blames Gordon Brown, saying “The man who led HMRC for ten years, has to take responsibility for the mess he left behind.

And so they should, with excellent tax breaks and more generous limits on contributions, the fruit is ripe for the picking.

Research by Fidelity FundsNetwork shows nearly a quarter of a million people in the 25-34 age range are saving serious amounts on a monthly basis.

Tax breaks mean pensions are a highly efficient form of saving albeit the least liquid. SIPPs are also becoming popular with the younger investor.

Head of Fidelity FundsNetwork, David Dalton-Brown commented, “Time is one of the saver’s greatest allies: the earlier you start, the less you have to set aside to reach your goal and the long-term growth potential of equities should not be under-estimated.”

Ironically, it was Gordon’s last stand as Chancellor that actually pulled the rate last year, but if a week is a long time in politics, then a year is ancient history.

Meanwhile, as the lower paid rightfully squeal with indignation at something ‘Old’ Labour clearly would never have contemplated and the strangely self-righteous middle-England tax-winners writhe in guilty discomfort, maybe the concern for all taxpayers should be how much the doing, undoing and subsequent doing of all this has cost the public purse.

Admitting mistakes can be strength or weakness depending on where you sit but announcements that inquiries will be made into who and how people are affected by the reforms set alarm bells ringing.

Would it be too much to assume inquiries had been made prior to the design of the tax structures?

If you’re planning to drop in a lump sum or just fill out your Stakeholder with its annual
£3,600 contribution in one hit, do bear in mind that 2p in the pound more will be coming
from your pocket after 6th April.

So on the stakeholder example whereas you would pay in £2,808 and get £792 added by HMRC, after 6th April you will pay £72 more.

As noted previously this tax change wasn’t mentioned in this month’s budget – because it
was scheduled last year – and should rake in around £2.6 billion for the treasury.