Initial reactions

22nd April 2009

"Tax rises are to hit earlier, harder and wider than expected. Moreover, increases in alcohol, tobacco and fuel duties ensure that it is not simply high earners who will suffer the pain.

On the plus side, increased capital allowances and enhanced opportunities to benefit from carry-back relief on losses suggest that the Chancellor is trying to kick-start the business economy on the basis that the sooner we get through the recession the sooner tax revenues will start to increase.

High earners are clearly going to be feeling under the cosh. There will be the loss of personal allowances from next year for those earning over £100,000 pa and a new higher rate of 50% for those earning over £150,000, followed by a reduction in pension relief for those earning over £150,000 in 2011,"

said Richard Mannion, national tax director at Smith & Williamson, the accountancy and financial services group.

NB These comments are prepared before the full HMRC press releases become available. We will be providing further comment as the press releases are released.