As from April 2010, those with taxable incomes in excess of £150,000 will pay income tax at the rate of 50%.
It will currently affect 280,000 taxpayers out of a total of 31.6 million who have income at or above £150,000 per annum based on figures from tax year 2006-7. This represents 0.886% (less than 1%).
From April 2011, tax relief on pension’s contributions will be restricted to those with incomes over £150,000.
Legislation is to be introduced to prevent individuals taking advantage of the pensions tax relief while it is still available to them at a higher rate, by making substantial additional pension contributions prior to the restriction taking effect. Those who have never earned in excess of £150,000 are unaffected, as are those who continue with their regular pattern of contributions.