TaxAdministrationTreasury revises revenue from 50% rate

Treasury revises revenue from 50% rate

Lord Myners reveals revenues from the new higher rate will fail to meet expectations

Treasury

The Treasury is expecting to take much less from the new 50% rate of income
tax than it first estimated, according to Treasury minister Lord Myners.

Speaking in the
House
of Lords
yesterday the financial services secretary said the rate would
still be beneficial in terms revenues, but suggested the full extent to which
tax payers would avoid the new rate had not been correctly gauged in advance.

He said the Treasury had: “made adjustments for the behavioural consequences
of a new higher rate of taxation and accordingly have significantly reduced the
anticipated tax take.

He added: “We still believe that it will be beneficial.” He then said the
precision of any estimates “depends on the rates of income of the individual
people who chose to go overseas.”

Lord Myners said: “It is clear to me that very small numbers of people appear
to have gone overseas as a consequence of the increase in the highest rate of
taxation. I remind the House that it applies to less than 2 per cent of the
working population.”

Taxpayers are using a number ofstrategies to avoid the tax. One involves
leaving income within a company to be drawn down later. Others include receiving
pay rises to compensate for the increased rate, moving overseas of chanelling
money through charitable donations.

Read more:

Taxman
to target 50% avoidance

Related Articles

LITRG urges government to consider tax changes in disability work plan

Administration LITRG urges government to consider tax changes in disability work plan

1d Lucy Skoulding, Reporter
HMRC appeal rejected in Tottenham Hotspur case

Administration HMRC appeal rejected in Tottenham Hotspur case

2w Emma Smith, Managing Editor
HMRC issues updated Trusts Registration Service guidance

Administration HMRC issues updated Trusts Registration Service guidance

2w Emma Smith, Managing Editor
New trading allowance: simplicity, but not as we know it

Administration New trading allowance: simplicity, but not as we know it

2m Emma Rawson, ATT Technical Officer
‘Improve rather than lose’ disincorporation relief, tax body urges

Administration ‘Improve rather than lose’ disincorporation relief, tax body urges

3m Austin Clark, Reporter
Are you ready for the Trusts Registration Service?

Administration Are you ready for the Trusts Registration Service?

3m Helen Thornley, ATT Technical Officer
Advisers bullish despite Brexit concerns

Accounting Standards Advisers bullish despite Brexit concerns

1y Fraser Simpson, Reporter
Brexit: Five questions accountants should be asking

Accounting Firms Brexit: Five questions accountants should be asking

1y Fraser Simpson, Reporter