Nichola Ross Martin's Tax Consultancy

From 2010/11:

• A 50% top rate of income tax applies to those with a taxable income in excess of £150,000.
• The personal allowance is reduced by £1 for every £2 of income over £100,000, see Tax rates and allowances. This produces a marginal tax rate of 60% for someone whose income falls into the band £100,000 to £113,000.

From 2011/12:

• Tax relief on pension contributions is going to be restricted for higher earners, see Pensions tax planning.
• National Insurance also increases by 1%. This will also apply to employer contributions, see Tax rates and allowances.

How to avoid paying tax at 50% (60% in some cases)

The basics

• Rearrange your income producing assets to use up lower tax rate band of spouse, partner or family, see Shifting your income to save tax.
• Review your investments and deposits to accelerate income and interest where possible, and change income producing products into those which will see capital growth instead, our guide Private Client: tax planning for the 2009/10 year-end contains many tips that are still current in 2010/11 and beyond.

The Entrepreneur

• Consider dissolving an existing company in order to distribute assets as capital, see Companies: ceasing trading.
• Consider a buy-back of shares if you have exiting shareholders or shareholders considering retirement.
• Will a flexible trading structure allow remuneration and benefits planning to avoid marginal tax rates? See Will I pay less tax if I trade via a partnership?
• Maximise tax-free and tax-efficient benefits see Tax-free benefits in kind and perks.

The Employer

• Smaller employers should consider setting up an Enterprise Management Incentive (EMI) share option scheme in order to reward and incentivise key staff when trading results restrict bonuses (and the company share value is depressed).
• An unapproved share scheme may also have its advantages as a method of avoiding NICs, and the employer will generally receive tax relief on any share award, see Share scheme basics for small companies. 
• Consider making discretionary bonus awards to employees of non-taxable benefits. This is not going to be effective for contractural bonus incentives, but can be one way of introducing a work's canteen (employer subsidised lunch) as these are not effective if part of salary sacrifice arrangement after April 2011, see salary sacrifice arrangement for a fuller discussion as this will save employers NICs too.
• You also need to look at the various options (salary or dividend?) which are considered in the section Tax planning for directors; and note the summary in Will I pay less tax if I trade via a partnership?

 The Schemer

• Tax Avoidance Schemes is a guide that consider some of the current generation of tax avoidance schemes on the market. Note that we do not condone any schemes mentioned, caveat emptor.