We have already benefited from increases in personal allowances and the basic rate tax band for the current tax year. Although, to temper this, higher rate taxpayers will notice an increase in their National Insurance Contributions as their upper earnings limit rose significantly on 6 April.

All taxpayers will be affected by a ½% National Insurance Contribution increase, which the Chancellor, in his November Pre-Budget Report, proposed would apply from April 2011.

In a move to bring forward tax increases for higher earners, individuals earning above £150,000 will have to face the prospect of a 10% tax increase from 6 April 2010, instead of a 5% increase from 6 April 2011. This tax increase will also apply to trustees.

On top of this, personal allowances will be restricted for individuals earning over £100,000 from 6 April 2010.

• No change in basic rate of income tax of 20% for 2009/2010
• Increase in higher rate tax to 42½% for dividend income and to 50% for other income from 2010/2011 for individuals earning over £150,000 and for trustees (without an income threshold)
• Personal income tax allowance and basic rate limit already raised for 2009/2010
• Individuals earning over £100,000 will lose part or all of their personal allowances in 2010/2011, based on a reduction  of £1 for every £2 of income in excess of £100,000
• National Insurance Contribution rates have remained unchanged for 2009/2010.  The upper limit was increased from £40,040 to £43,875 for 2009/2010; the lower limit was increased in line with inflation
• National Insurance Contribution rates to increase by a ½% from 2011/2012.

However, it's not all gloom and doom.

• It appears that it will be possible to deduct pension contributions to reduce income below the £100,000 income limit to preserve the personal allowance
• Employees can reduce the impact of the increased National Insurance charge by using salary sacrifice
• Trustees may not be affected by the proposed income tax increases where, as in many cases, tax will fall to be charged on a lower tax paying settlor or beneficiary

Additionally, investment bonds can be very convenient for individual and trustee investments, as income tax can be deferred, perhaps until a lower tax rate applies on encashment in retirement. In addition to this, bonds can be given away without triggering a tax charge, which can be particularly useful for making gifts into trust and for appointing benefits out of trust to beneficiaries who may pay a lower rate of tax on encashment.