PLANNING ahead could save Huntingdonshire businesses money when the new 50 per cent tax rate takes effect on April 6 next year. Taking time to assess the effect of the change in top rate tax could pay dividends according to KPMG Cambridge, who have compiled a list of ten handy tips. Helen Sant, head of tax at KPMG in Cambridge, said: "The new 50 per cent rate is just a few months away but there is still time to plan for it using our top ten tips. "By being smart about the timing of financial decisions and ensuring that you take full advantage of tax allowances and tax-efficient savings vehicles, people can, to some extent, mitigate the effects of the new top rate of tax." 1) Consider whether you can bring forward income to the current tax year. Is there scope to take bonuses or dividends before 5 April so that they will be taxed at the current lower tax rates? Your employer may even be willing to pay a few months salary in advance. You should be aware that by advancing the income you will also bring forward the date the tax is payable. 2) Review your deposit accounts. If they pay interest only once a year and that will fall after 5 April consider closing the account so that the bank will pay closing interest accrued to date before 5 April so that the interest will be taxed in the current tax year. 3) Review life assurance-based investments where you can currently take a five per cent withdrawal tax-free each year. On encashment the profits are subject to income tax so consider whether you should encash before April 5 2010. Similarly the growth in value of treasury stock can be subject to income tax so consider realising the value before 5 April. 4) If you have family trusts which will be affected by the new rates consider making distributions to the beneficiaries before April 5 of all accrued income to avoid a further 10 per cent tax charge on this income. 5) Review your investment portfolio. Consider holding investments that produce growth in a capital form which is therefore subject to capital gains tax rather than income tax. Annual cash requirements could be met through the disposal of assets within the portfolio rather than relying on dividend income. 6) Equalise income between spouses. If you earn more than \u00A3150,000 and your spouse doesn't, consider transferring income-producing assets to them to take advantage of their lower rate tax bands. Similarly consider who acquires future income-producing assets to ensure lower rate bands and unused allowances of your spouse and other family members are utilised. 7) Ask your employer to consider implementing a share incentive scheme as part of your remuneration package. There are a number of Government-approved schemes which allow employees to benefit in the growth in value of the company at capital gains tax rates which, for high earners, will be considerably lower than the income tax payable on a cash bonus. 8) Discuss with your financial adviser whether you should, as part of your overall investment strategy, make an investment in a qualifying Enterprise Investment Scheme (EIS) company or a Venture Capital Trust (VCT). These are higher risk investments with generous tax breaks. You can get 20 per cent income tax relief on a qualifying EIS investment up to \u00A3500,000, giving an absolute saving of \u00A3100,000, plus after three years you can sell the shares completely free of capital gains tax. Relief is available at 30 per cent on a VCT investment up to \u00A3200,000. In addition VCT dividends are tax-free and the investment can be cashed in tax-free after five years. 9) Consider deferring claims for tax reliefs such as income tax losses until the tax year ended April 5 2011 where tax relief will be available at 50 per cent rather than 40 per cent. Similarly consider deferring claims for capital allowances to the year ended April 5 2011 so that tax relief is available at 50 per cent rather than 40 per cent. 10) Consider deferring gift aid payments until after 6 April 2010 when you should get relief at 30 per cent rather than 20 per cent on your donation. Obviously you need to consider the impact on the charity as well. A recap of how the 50 per cent tax operates: All income over \u00A3150,000 will be taxed at 50 per cent, except dividend income which will be taxed at an effective rate of 36.1 per cent. In addition, those earning over \u00A3112,950 will lose entitlement to the tax-free personal allowance (currently \u00A36,475) with a restriction in the allowance for those earning over \u00A3100,000. In addition, most types of trusts will suffer 50 per cent tax on all non-dividend income over \u00A31,000 from 6 April 2010.