50p tax will lose UK cash
THE TOP rate of tax drives high earners to leave the UK or use innovative accounting techniques, reducing tax revenues over the coming years and damaging the economy’s performance, a new report from the Centre for economics and business studies (Cebr) warned yesterday.
The government will gain around £2.5bn from the 50 per cent tax on incomes over £150,000 in this financial year, but that will become negative in 2013/14 and lose £1bn per year from 2015, the report claimed.
In a highly globalised economy, it is not possible to tax the wealthy effectively, the Cebr argued, pointing to surveys showing 56 per cent of UK-based millionaires are not certain they will stay in the country.
The international nature of financial services means taxes can be avoided with little difficulty. “Income tax has largely become a voluntary tax for high earners,” the report claimed.