Chancellor of the Exchequer Alistair Darling today announced in his 2009 Budget that he was not proposing to make any increase in income tax during 2009-10 but that taxes would rise for top-rate taxpayers in 2010-11.
2009-10 tax rates confirmed
The basic rate of income tax stays at 20%. Higher rate income tax at 40% is payable on taxable income (gross income less personal allowance) above £37,400.
New 50% tax band from 2010
The 2009-10 tax bands remain at 20% and 40%, but in 2010 a new 50% band will be added for those whose taxable income is above £150,000.
Personal allowance to be lost by high earners
2010 will also see the loss of the tax-free personal allowance for those with income above £100,000. They will lose their personal allowance at the rate of £1 for every £2 above the £100,000 income limit, with no allowance at all if their income is high enough.
Personal budget calculator
To see what effect the Budget will have on your own finances, try out our Budget 2009 calculator.
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