Additional rate tax is likely to be scrapped September 2011
Posted date: 2 September 2011
The 50 pence tax rate is likely to be scrapped after George Osborne described the levy as “very uncompetitive”.
The Chancellor’s comments suggest that there is minimal point continuing with the additional tax rate and are the strongest hint yet that it will be scrapped. He believes that the high duty gains little revenue and deters businesses from investing.
Speaking on Radio 4’s Today programme, Osborne acknowledged the need for more growth in the UK and admitted that he did not view the levy as a “lasting rate” for UK taxpayers.
The 50 pence rate affects those earning more than £150,000, and was introduced by Labour as an additional revenue stream. HM Revenue & Customs (HMRC) is currently conducting a review of the Income Tax to find out exactly how much money is generated from it. The findings are expected to be announced in the spring.
Although no official announcement has been made as to when the rate might be abolished, many Tory MPs believe that a date in April 2013 will be set following HMRC’s findings.
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