Methods to reduce Tax for Employers and Employees at all levels...

...and why Darling's highest rate tax will be 60% not 50%

The Chancellor has hit higher earners with a 50% headline rate, but some could be facing a much higher rate.  From 2010 those earning more than £100,000 will face a loss of their personal allowance at a rate of £1 for every additional £2 earned until the allowance is exhausted.  As higher rate tax payers pay forty pence in the pound, the loss of fifty pence for each pound over the threshold results in an additional liability of twenty pence making 60% on earnings roughly between £100k and £113k.
Those affected may have even more reason to consider Salary Sacrifice in exchange for pension contributions direct from their employer.  In addition to tax, this also reduces the employee’s own National Insurance (NI) contributions and saves the employer on 12.8% NI (13.2% from 2011).  Employed directors or key employees may even have all or part of the employer NI commuted into additional pension contributions. 
Individuals earning over £150,000 face a higher rate of 50% (42.5% on dividends) and, from 2011 a gradual reduction in available pension tax relief to 20% when they reach £180,000.  HMRC have indicated that as well as clamping down on contributions made between now and then that exceed those the individual would normally make that attempts to circumvent this will be addressed.  Serious consideration must be given to the benefits of pensions compared to other tax efficient investments (mentioned below).  Nevertheless, Salary Sacrifice remains a serious potential benefit to those below these thresholds.
Thus far we have examined the impact on only higher earners, but before you switch off if you are not affected by this, we need to look at the broader picture for most employers and employees
On the introduction of the announced “Personal Accounts” for pensions, Employers not already providing pensions will also eventually face the additional cost of paying 3% of employee wages between set limits.  Setting up an alternative permitted scheme via salary sacrifice has potential benefits both immediately in National Insurance Savings and, in addition to this when the Accounts are introduced, through only enrolling employees after three months of service.   Personal Account will require immediate enrolment and this might be an unwelcome cost and unnecessary administrative burden to those employers with transient or seasonal staff.

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