50p tax rate kicks off today

The 50p top rate of tax comes into force from today.

Britain's best paid workers will have to give up 50p in the pound for any income over a threshold of £150,000.

The introduction of the new rate forms part of government moves to slash the UK's spending deficit, which stands at close to £170bn.

The banking industry suffered a double whammy with the payroll tax on bonuses, however the feared exodus of high-net worth individuals in the wake of these changes did not materialise.

A court ruling on a residency dispute involving tycoon Robert Gaines-Cooper which saw judges side with HMRevenue & Customs put doubts in the minds of those considering a move to another tax jurisdiction, advisers said.

The Treasury is now considering a statutory residence test, another development which may have also deterred rich individuals wanting to continue working in London from relocating overseas.

Further reading:

Budget 2010: Tax rises worth £19bn planned