Plans to scrap the 50% tax rate?

Chancellor George Osborne wants to scrap the 50p income tax rate, branding it ‘uncompetitive’ and saying it does not raise enough money. Speaking to the BBC’s Today program Osborne said the tax remained under review following criticism that tax avoidance measures meant the tax was raising less income than expected.

‘There’s not much point in having taxes that are very economically inefficient,’ said Osborne. ‘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.

‘What is it actually raising? It’s only been in operation for a year this tax, put in place by the last government. I’ve asked the Inland Revenue to assess what the revenues are actually from this 50p tax rate, whether it’s raising money or not.’

Osborne said the figure would not be known until the end of the year until people send their self-assessment tax forms back. He added that the government had increased capital gains tax and introduced a bank tax to respond to calls for the wealthy to contribute sufficient amounts to society.

‘I’m taking very tough action on tax avoidance,’ said Osborne.