• Income tax
• National insurance contributions (NIC)
• Pension schemes – the lifetime allowance and annual contribution allowance
• Disabled company car drivers

Income tax

Income tax allowances

The personal allowances for those aged:

• under 65 will increase from £6,035 for the 2008/9 tax year to £6,475 for the 2009/10 tax year;
• between 65 and 74 will increase from £9,030 for the 2008/9 tax year to £9,490 for the 2009/10 tax year; and
• over 74 will increase from £9,180 for the 2008/9 tax year to £9,640 for the 2009/10 tax year.

From 6 April 2010, the basic personal allowance for income tax will be reduced by up to 50% for those earning between £100,000 and £140,000, and reduced by up to 100% for those earning over £140,000.

Income tax rates

From 6 April 2011, a new 45% rate of income tax will apply to taxable non-savings and savings income above £150,000. At the same time, a new 37.5% rate of tax will apply to taxable dividend income above £150,000.

From 6 April 2011, the dividend trust rate and the trust rate of tax will be increased to 37.5% and 45% respectively.

National insurance contributions (NIC)

On or after 6 April 2009, the upper earnings limit for Class 1 NIC will be aligned with the level at which people start to pay higher rate income tax.

From 6 April 2011:

• the NIC primary threshold will be broadly aligned with the income tax personal allowance.
• the main rate of Class 1 and Class 4 NIC will be increased by 0.5% to 11.5% and 8.5% respectively.
• the Class 1 employer rate of NIC will be increased by 0.5% to 13.3%. The increased rate will also apply to Class 1A and Class 1B contributions.
• the additional rate of Class 1 and 4 NIC will be increased by 0.5% to 1.5%.

Pension schemes – the lifetime allowance and annual contribution allowance

As of 6 April 2010:

• the lifetime allowance available to pension scheme members who take pension and lump sum benefits will rise from £1.75million in 2009/10 to £1.8m; and
• the annual contribution allowance will increase from £245,000 in 2009/10 to £255,000.

In both cases, the increased rates will be held constant for a further five tax years i.e., up to and including the tax year 2015/16.

Disabled company car drivers

From 6 April 2009, legislation will be introduced to allow disabled company car drivers driving an automatic car to use the lower list price of an equivalent manual car to work out the benefit charge.