Income tax rates and high earners

Graham Chase, Tax Partner, CMS
There was no change to income tax rates, which remain at 2010/11 levels.  Whilst high earners will be disappointed by retention of  the 50% rate, the Chancellor did stress that it was a temporary measure and acknowledged that it could do lasting damage to the British economy. Realistically, it is difficult to see what else the Chancellor could say.
The proposed increase in personal allowances (£7,475 for 2011/12 as announced last year and £8,015 for 2012/13) does not, of course, benefit all.  This is because the allowance is reduced for those with taxable income over £100,000 and wiped out entirely for those with taxable income of (broadly) more than £115k (pension contributions reduce taxable income for the purposes of the calculation). 

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