How do you solve the puzzle of higher rate taxes?

In spite of the country’s economic woes, it may surprise you to know that the numbers are increasing. Two years ago, in the 2009/10 tax year, there were over half a million fewer higher rate taxpayers and no additional rate tax payers – 50% tax did not arrive until April 2010.

The coming tax year will probably see this upward trend continue. Although your personal allowance will increase by £630 in 2012/13, the band of income on which you pay only basic rate tax will shrink by an equal amount, so the higher rate tax threshold will be unchanged at £42,475.

The income threshold at which the personal allowance is phased out will remain at £100,000, while the additional rate will once more start at £150,000 of income.

Freezing thresholds in the face of inflation is one of the oldest and most frequently used techniques in the Treasury’s extensive armoury of stealth taxes. It is likely that this well-tried method will continue to be used to gather extra revenue over the coming years. The state of the Government’s finances, combined with the politics of coalition government, rule out anything approaching tax cuts at higher income levels.

The message is clear: if you want to reduce the amount of tax you pay, then the solution is in your hands.

Our blog over the coming weeks will explore the four key planning areas for higher and additional rate taxpayers:

*Income tax mitigation
*How to efficiently realise capital gains
*The key importance of pension provision planning
*How tax affects your choice of investment structures.

Thinking and planning ahead could help you to lessen the burden of higher tax rates – and we’re always here to help!

Sign up to receive our blog, so you don’t miss out on the latest news and developments.

If Tax matters to you, YOU matter to us

Advertisements

One Response to How do you solve the puzzle of higher rate taxes?

  1. paulatkinson01@btinternet.com says:

    Thanks for posting this! Look forward to seeing the various other articles you intend to post around Tax.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

My CMS

We are a firm of Accountants based in Harrow, Middlesex offering tips and tax advice to help sole traders, individuals and businesses in the UK grow. We'll also keep you up-to-date with the latest tax news hitting the headlines! We hope you find our blog helpful and appreciate any feedback.

Enplug

Our startup's blog

iShade's Curator Comments

Accounting Profession Beat by Korinne DePew (as of 12/3/13)

Lawrence Grant Chartered Accountants

We are a firm of Accountants based in Harrow, Middlesex offering tips and tax advice to help sole traders, individuals and businesses in the UK grow. We'll also keep you up-to-date with the latest tax news hitting the headlines! We hope you find our blog helpful and appreciate any feedback.

Les Conway

I offer a comprehensive financial planning service covering all aspects including retirement planning, protection and investment needs

%d bloggers like this: