Chancellor confirms 50p tax rate 'under review'
Wednesday, 17 August 2011 08:51
The Chancellor George Osborne has confirmed that HMRC is reviewing the 50% top rate of income tax, fuelling speculation that the rate will be scrapped next year.
Speaking on BBC Radio 4's Today programme, Osborne signalled that the 50p tax rate, which was introduced by the previous Labour government, may be a temporary measure.
'I've said with the 50p rate I don't see that as a lasting tax rate for Britain because it's very uncompetitive internationally, and people frankly can move,' he said. 'What is it actually raising? It's only been in operation for a year this tax, put in place by the last government'.
HMRC will now examine its data to assess whether or not the 50p tax rate is generating money. However, the figures will not be known until at least the end of the tax year next April.
'Since people don't send their self-assessment forms back until the end of the year we won't be able to get that assessment until the end of the year or more likely the beginning of next year, but we are going to do that assessment,' he added.
The move follows calls from business leaders to scrap the top tax rate in order to boost UK enterprise. Many politicians also believe the rate is driving business away from the UK and penalises entrepreneurs.
The 50% income tax rate was introduced in April 2010 and affects those earning over £150,000.