Will the rich in the UK really pay the 50% higher tax rate?
Sometime ago the Labour government decided that the best way to give itself a fighting chance at the next election was purely and simply to tax the rich and attack the banking community. As a consequence we saw the introduction of the 50% tax rate on income over £150,000 a year which the government initially forecast would raise in excess of £1.1 billion in additional revenue per year. However, City Minister Lord Myners has today stepped forward to confirm this figure has been revised downwards although no replacement figure has been released.
Finally it seems that the UK government now appreciates the fact that those caught in the higher tax band will do everything they can to maintain their lifestyles and reduce their tax liabilities. Unfortunately, they will also refrain from potentially high-risk investments which will impact on the UK economy in the medium to longer term. All in all, those who were expected to present the UK government with extra tax revenue on income over £150,000 will make use of all legal tax reduction schemes or indeed, as many have hinted, potentially move overseas.
It will be interesting to see exactly what additional income the 50% tax band brings in and whether it is anywhere near the £1.1 billion widely reported in the press.
Share this..
Related stories
Gordon Brown set to speak at United Nations conference
The United Nations conference, which is being held ahead of the G20 summit, has seen a very compelling and passionate speech from president Obama. He, like so many leaders around the world, believes that while there has been significant improvement in the worldwide economy, now is not the time to take the foot off the gas and starve economies of liquidity.
Gordon Brown is set to add...
Should Royal Bank of Scotland staff receive a bonus?
The subject of bonuses at Royal Bank of Scotland has been in the headlines for many days now with contrary opinions emerging almost hourly. Some believe it is obscene for £1 billion to be put aside to pay bonuses to staff at Royal Bank of Scotland while others believe it is the only way to maintain and retain a high calibre of staff for the future. The truth is that the UK government has inves...
Read MoreNext drops a bombshell on the UK retail sector
While the UK retail sector is at the moment basking in glory with signs of an upturn, the retail giant Next has somewhat spoiled the party with an indication that the improvement in retail sales in the first six months of this year may not follow through into the latter part of 2009. The company expects sales to drop by between 3.5% and 6.5% in the second half of 2009 which has caught the market s...
Read MoreNumber of people paying top rate tax set to fall
Despite the fact that the UK government is set to introduce a 50% top rate of income tax the government's own figures suggest the next two years will see a significant fall in the number of people caught up in the high rate tax band. It is estimated that the number of people paying 40% tax will fall from 3.89 million in 2007/08 to 2.9 million in 2009/10. This will see a significant fall in the gov...
Read MoreOver 2.9 million financial service complaints registered last year
The financial services industry has taken a serious battering over the last two or three years with complaints reaching record levels having risen from 2.72 million in 2006 to 3.4 million in 2007, although there has been a slight decline to 2.9 million in 2008. However, with over 1.2 million of these claims currently "parked" until they have been resolved between the parties or else go to the cour...
Read More