Alistair Darling introduced a new 50% income tax rate, a cut in personal allowances for those on more than £100,000 per year and a reduction in pension tax relief for those on £150,000.  The new 50% income tax rate - for earnings above £150,000 a year - will replace the 45% rate announced in last November’s Pre Budget report, and will now be introduced in a year’s time instead of April 2011.  That leaves Labour open to the charge of breaking their manifesto pledge not to raise income taxes - unless they go to the country before then.  As widely predicted, the chancellor also moved to clamp down on higher rate pensions tax relief, though he stopped short of its total abolition. From April 2011 tax relief on pension contributions will be restricted for those earning over £150,000 a year, tapering down to 20% for incomes over £180,000. The government is also planning to introduce measures to retrospectively tax individuals looking to take advantage of the relief over the next weeks, before the budget is signed into law. Tax on dividends, meanwhile, will be increased to 42.5% rather than the 37.5% announced in the pre-Budget speech, for those with incomes above £150,000.  And the value of personal allowances will be restricted for those with incomes over £100,000, tapering down to zero.  It all adds up to Labour’s biggest tax raid on the wealthy since it came to power in 1997.

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Budget 2009: Alistair Darling reveals scale of national debt