Income tax
Following the compensation arrangements arising from the
abolition of the 10% rate band, the Government will make
permanent the £600 increase in the personal allowance with a
further increase of £130 above indexation, meaning basic rate
taxpayers pay £145 less a year in tax in 2009/10.
The basic rate limit for 2009/10 will be increased by £800 above
indexation. The Chancellor announced the tax thresholds and
personal allowances for 2009/10 as follows:

INCOME TAX                      2008/09                    2009/10
Starting rate band*                    £2,320                        £2,440
Tax rate                                      10%                            10%
Basic rate band                        £34,800                      £37,400
Tax rate                                      20%                            20%  
Basic rate for dividend income      10%                            10%
Higher rate - income over          £34,800                      £37.400
Tax rate                                      40%                            40%
Higher rate for dividend income      32.5%                      32.5%
Personal Allowances (Age at the end of the tax year)
Under 65                                  £6,035                        £6,475
65 - 74                                    £9,030                        £9,490
75 and over                              £9,180                        £9,640
Higher allowances scaled
back if income exceeds            £21,800                      £22,900

From 2010/11, those with gross income in excess of £100,000 will lose some or all of their personal allowances.  The basic allowance will be scaled back in two stages:
1. where gross income is between £100,000 and £140,000, to a minimum of 50%, and
2.  where gross income exceeds £140,000, to a minimum of £0.
The scaling will be achieved by reducing the allowance by £1 for every £2 by which  gross income exceeds the £100,000 and £140,000 thresholds.

Announced for 2011/12 are new higher rates of tax:
for those with higher incomes, a tax rate of 45% will apply to savings and non-savings income over £150,000
a new 37.5% rate of tax will apply to taxable dividend income above £150,000
the rate of tax for trusts will be increased to 45%, with trust dividend income      liable at 37.5%.