Budget changes make salary sacrifice an even more attractive option for high earners

With the news that those earning in excess of 100,000 per annum will be facing higher levels of income tax and losing personal tax allowances, salary sacrifice is becoming an more attractive option than ever before, for high earners.

Not only will those earning over 100,000 have to contend with the gradual loss of the personal tax allowances from next April, but those who are also fortunate enough to earn more than 150,000 will face a new higher level of income tax of 50 per cent from April 2010.

To add insult to injury from 2011 those earning more than 150,000 per annum will also have to contend with a gradual reduction in the tax relief they are currently receiving on their current pension contributions, down to a base of 20 per cent if they earn more than 180,000 per annum.

Michael Whitfield, Chief Executive Officer of Thomsons Online Benefits comments ìIt is abundantly clear that for high earners, clear, pragmatic and sound financial advice has never been more appropriate, as are innovative value adding solutions such as salary sacrifice.î