Local accountants DJH Accountants Ltd are warning those earning over £150,000 across Staffordshire and Cheshire, including our local footballing heroes, to be prepared as the current financial year comes to an end and a sharp increase in their tax bills come into force.

The new top rate of 50 per cent on incomes of more than £150,000 is just one of many measures that will see high earners contributing extra in tax by 2012.   From April this year any income of more than £150,000 will be taxed at the new top rate of 50% and this rate will affect over 350,000 people across the UK.

Many premiership footballers earn in excess of £150,000 per week and this will mean they will pay an extra £770,200 in tax each year if for example they earn £151,000 per week.

In addition, from April 6, 2010, the personal tax allowance, currently £6,475 for a single person, will be cut by £1 for every £2 of income over £100,000 so that it is completely withdrawn for those earning £112,950 or more and higher earners also face a new tax on their pension contributions. From April 2011, anyone earning more than £150,000 will see the 40 per cent tax relief on money paid into their pension stopped. 

Chris Beardmore Director at DJH comments: "Life is going to get tougher for high earners with these new rules. Tax on dividend income also rises to 42.5 per cent to stop directors and senior executives trying to avoid being hit by the 50 per cent top rate of tax by paying themselves in dividends.  It is vital therefore that good tax planning is implemented to lessen the blow.

What's more, the increases don't stop there. There will be a half-percentage point increase in National Insurance from April 2011, applicable to all workers earning above £6,500 per year, high earners will pay a total of 51½p in tax on every pound they earn above £150,000."