Year End Tax Review 2009/2010 Contents Lead articles The year ahead... This year, next year Pension hit Employees Too much NIC NIC and pensions Company cars Tax-free benefits Business - General Time to incorporate? His and hers Family bonus Profit and loss Show me the money Can't pay, won't pay? Turning back the clock Business - VAT Standard VAT or flat VAT? VAT goes down - must come up? European revolution A good start for VAT Happy returns? Investments Top-up savings Rainy day money Capital Gains Gains favoured Splitting gains A place in the country Holiday lets end Families Family fortunes Where there's a Will Credits and debits Piggy banks Still trustworthy? Administration Penalty shoot-out Paperwork, paperwork Pay tax later Opportunity knocks again Charity Give and save Non-Domiciled People Home and away Interest Interesting times

Pension hit If you earn at least £150,000 a year, you will be concerned about the new 50% tax rate coming in on 6 April 2010. You should also be looking at new restrictions on tax relief for pension contributions. Although that's only due to bite on 6 April 2011, there are rules now to stop people advancing the contributions they would make after that date to take advantage of the more favourable relief now. What this means is that there will be a tax hit for anyone who pays more than their regular contributions and more than £20,000 a year from 22 April 2009 to 5 April 2011. Regular contributions are payments under a pre-existing contract which are made quarterly or more frequently, but a higher limit applies if contributions averaging up to £30,000 a year were made in each of 2006/07, 2007/08 and 2008/09. The effect of the charge is to withdraw the 20% higher rate relief that would have been enjoyed at the top rate of tax. This does not affect people with income below £150,000 or pension contributions below £20,000 a year, but it could have a significant impact on anyone above those limits. From 9 December 2009 onwards, a contribution your employer makes is added to your salary to see if you go over £150,000. Action Point! If this affects you, take advice before paying pension contributions