Tax payers need to enter the new tax year with caution - with the emphasis on planning ahead with tax, national insurance and pension contributions all set to change from 6th April 2011. And by a strange quirk, from 6 April 2010 those earning between £100,000 and £113,000 the effective tax rate will be at 61% - the highest rate since 1979.

Terri Halstead, Tax Partner at the Birmingham office of Haines Watts said the changes planned were amongst the most draconian for several years.

"Normally at this time, there is a last minute rush regarding tax position for the current tax year but this time round, tax payers' sights need to be set 12 months down the line," said Ms Halstead.

"Typical pre-year end planning involves making pension contributions to achieve 40% tax relief. However, anti-avoidance measures introduced in the 2009 budget have added complications and from 6th April next year, for those earning more than £150,000, relief for pension contributions will be restricted to 20%. 

"However, to prevent tax payers making large pension contributions prior to then, anti-avoidance measures have been introduced which could impact on pension contributions for the current year," she said.

"Given the current state of the Treasury finances, it is almost certain that further tax increases will follow - no matter the colour of government. It may well be a good idea to bring forward income into the current year and delay expenditure and deductions to future years.

"Capital gains is another area payable at 10% on the disposal of business assets and 18% on non-business assets. If you have asset gains, consider crystallising them to benefit from these tax rates. Given the increase in margin between income and capital gains tax, this must be an area that will soon be attacked by the government," said Ms Halstead.