The chancellor of the Exchequer, Alistair Darling, announced in the pre-Budget report in November the income tax rate for staff earning more than £150,000 would increase from 40% to 45% by 2011, but George Bull, head of tax at Baker Tilly, said: "We know about this increase to the top rate of income tax, but I do not rule out further increases. The chancellor might take a swipe at high earners."
Following the press attention around the £703,000 pension paid to Royal Bank of Scotland boss Sir Fred ‘the shred' Goodwin, Bull believes Darling might want to increase government revenue from pension contributors.
"No one knows what sort of pension scheme Fred Goodwin had - it certainly was not a standard occupational scheme," he said. "But the Government might want to take a focus on pensions to raise revenue. But an increase on tax on basic rate pension contributions will be devastating. People cannot afford to retire as it is."
Budget 2009 Predictions: Pension savers and high earners could be targeted in tax rate increases
High earners and pension scheme members could suffer because of the Budget, due to be announced at the end of the month.
