Scrap 50p income tax rate, business leaders tell Osborne

THE 50p higher rate of income tax is “damaging the economy” and delaying the recovery from recession, more than 500 entrepreneurs and business owners have warned.

In a letter to The Daily Telegraph, the bosses of small and medium sized businesses across the country say the levy has meant they have not expanded their companies and taken on more workers.

They accuse chancellor George Osborne of putting “populist politics before sound economics”. Calling for it to be scrapped, they add that the ongoing imposition of the 50p higher rate of tax has left “wealth creators” in a “very awkward position”.

The intervention is likely to alarm the government ministers as those who have signed today’s letter represent the “bedrock” of British industry, whose future success is key to the economic recovery, the Telegraph said. It is the first time that these ordinary business owners have set out the damage caused by the levy.

Public criticism of the 50p rate had been largely limited to the heads of multi-national businesses and international entrepreneurs.

In the letter, the 537 businessmen say: “Given the current state of the UK economy, we urge the Chancellor to urgently consider scrapping the top rate of tax in his forthcoming budget.

“The tax, which is in effect a 58p tax after national insurance is taken into account, puts wealth creators like us in a very awkward position … penalising high earners through an unfair, politically motivated tax puts populist politics before sound economics.”