TaxPersonal TaxLib Dems dismiss 50% rate removal

Lib Dems dismiss 50% rate removal

Little chance for 50% income tax band to be canned, after Lib Dems suggest alternative tax would have to replace lost revenues

TORY ATTEMPTS to remove the top 50% rate of income tax on annual earnings over £150,000 have been effectively killed off at the Lib Dem party conference in Birmingham.

Party leader Nick Clegg and chief Treasury secretary Danny Alexander insisted the agreed Coalition target of raising the threshold for lower rate income tax to £10,000 must come first. They made it clear that even if the HMRC study into whether it has been effective in increasing revenue shows it has not, other means of ensuring “the wealthy” contribute to the cost of reducing government borrowing through a “million pound mansion tax” or a new form of “wealth tax” must be found.

Alexander additionally taunted critics with a new plan to raise the basic rate threshold to £12,500 to be put “on the front page” of the Lib Dems’ next general election manifesto and pledged an additional 2,250 tax inspectors “will move into anti-evasion and avoidance jobs” to ensure top earners contribute their share.

He told rank and file representatives, who gave him a standing ovation despite a handful of boos over spending cuts: “Some people have argued that we should change our tax priorities and focus our limited resources on cutting taxes for the wealthiest instead.

“At a time of austerity, this argument simply beggars belief. If we are ‘all in this together’, those with the broadest shoulders must bear the greatest burden.

“Fair taxation of the wealthiest is key to our deficit reduction plan.

“Of course, if a better way can be found to raise the money from this group, I will be willing to consider it.”

He claimed £2bn of an extra £7bn tax a year targeted was already being achieved by the tax crackdown, adding: “In less than a month’s time a new ‘affluent team’ will look specifically at the next 350,000 wealthiest taxpayers.

“These are the people who pay or should pay the 50p rate of tax. And my message to the small minority who don’t pay what they owe is simple. I agree with the chancellor. ‘We will find you and your money’ and you will pay your fair share.”

Earlier Clegg signaled his full support in advance in a more wide-ranging interview on BBC television.

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