Thursday, 24 November 2011

Treasury could lose billions to 50 per cent tax rate

British households could see their tax burden rise by £30 by 2016 due to the effects of the 50 per cent tax rate, according to a leading think-tank. The Centre for Economics and Business Research (CEBR) said the tax rate - which it says began as a "well-intentioned" move by the Labour government in 2009 - could well cost the Treasury much more than £1 billion from the flight abroad of many of Britain's high-earners. The chief executive of CEBR, Douglas McWilliams, said that the government will then have no choice but to turn to the less well-off tax payers to plug the shortfall."Every household in the country could have to pay £30 more in tax for the luxury of keeping this tax," he explained. "It starts to become a very expensive luxury."McWilliams admitted that the tax is currently earning more for the government, but warned that this will fall to a loss in the coming years if the tax is kept in place. He said that the only way to actually make more money in tax revenue would be to cut the top band to below 40 per cent - even lower than the original rate - which would make tax-avoidance schemes less attractive.

http://www.50percenttax.co.uk/index/2011/11/24/treasury-could-lose-billions-to-50-per-cent-tax-rate.html

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