SMEs call for an end to 50 per cent tax

Small and medium-sized businesses have called for an end to the 50 per cent tax rate, which they claim is “damaging the economy”.In a letter to the Telegraph, more than 500 entrepreneurs and business owners stated that the levy has meant that they have not been able to expand or take on more workers. This is turn is holding back the UK's economic recovery.The letter accuses chancellor George Osborne of putting “populist politics before sound economics” and suggests that by leaving the 50 per cent tax in place Mr Osborne is putting wealth creators in “a very awkward position”.Meanwhile, director-general of the Institute of Economic Affairs, Mark Littlewood, has stated that the scale of the backing is such that the chancellor needs to “take notice”. “To retain the top rate, in the face of increasing evidence mounting against it, would be a triumph of political posturing over economic reality,” he told the paper.Other groups, such as Liberal Democrat former Treasury spokesman Lord Newby, however, stated that now is not the time to reduce taxes when extra finances are needed to plug the “hole” in public funds.The decision will be made in the Budget due to be delivered by the chancellor later this month.

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