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Friday
May072010

High Earners Lose More Cash to Income Tax

I always keep a close eye on any changes to the tax system in this country, because they will typically affect a lot of our clients.  But it is the highest earners that will notice the difference when more changes take place in 2011.

Several reports have pointed out that this part of society will suffer in no less than five ways, all of which combine to produce this severe chop in earnings.  The biggest of all the changes concerns the abolishment of the personal allowance for those people earning over a certain amount each year.  While many lower earning individuals will not be affected by this, I am sure that anyone earning a decent income will feel the pinch as a result.

One example showed that assuming all things were equal, someone on £175,000 a year would end up taking home £18,000 less once all these changes introduced by the Labour government take place.  Some may hope that a change in government may lead to the cancelling of these measures, but this is by no means certain.

This is a huge drop for anyone to cope with.  I think it is usual for people on much lower incomes to say they would be glad to be earning £175,000 a year in the first place.  But if you have budgeted to that kind of income, a drop of £18,000 could severely affect the way you live.

Regardless of whether you are on an income that will be affected by these new measures or not, you can discuss your thoughts and concerns about your own tax situation at any point. Simply get in touch with St Matthew and we will help you in every possible way.

 



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    High Earners Lose More Cash to Income Tax - Tax, Legal & Business News from London - St Matthew Accountants London

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