Half of entrepreneurs in the dark on 50% tax rate, says Tenon

Almost half of the entrepreneurs in a Tenon poll said they have no idea how to react to the 50% top rate of tax looming on the horizon.

The Tenon Entrepreneur Forum found many entrepreneurs have not yet considered these issues at a time when they should be preparing for the new tax rate, which takes effect in April 2010.

Entrepreneurs will be hit hardest by next year’s rise in the top rate of income tax as they are 26 times more likely than the average person to earn over £150,000, the mid-tier firm reported.

Additionally two in five business owners admitted that they were unaware they would be affected by the reduction in tax relief on pensions for those earning over £150,000.

Andy Raynor, chief executive of Tenon said:

"The government aims to punish those responsible for the financial crisis but has hit the group best placed to lead the way out of recession, raising yet more questions about the government’s commitment to small businesses.

"This rise in income tax is self-defeating. It disincentivises wealth creation and undermines owners trying to build up their businesses – the very people who would provide a boost to the economy."