UK’s personal tax rate cut “highest seen globally”

UK’s personal tax rate cut “highest seen globally”

KPMG international finds UK's cut to top rate of personal tax has already made an impact on its attractiveness to executives

THE DROP in the UK’s top personal tax rate from 50% to 45% was the highest seen globally, and saw it move from 5th highest in the EU to 11th, according to research by KPMG International.

During its three years of operation, the UK’s 50% rate was widely criticised for driving high-earning individuals abroad and acting as a deterrent to entrepreneurship.

The global average income tax rate increased again this year by 0.3% – the second year in a row. This year also marks the second-highest quantity of rate increases – nine countries – since KPMG began collecting rate data in 2003.

“Targeting high income earners is a way for governments to gain revenue and be seen by taxpayers as doing something that is fair and necessary for the betterment of their country,” said KPMG’s global head of international executive services René Philips.

KPMG’s UK head of international executive services, Marc Burrows, added dropping the top rate 5% “enhanced the UK’s attractiveness to internationally mobile executives”.

“In our view there is a point at which tax rates can squeeze taxpayers too hard and act as a disincentive to growth and investment. At 50%, the UK was probably at that point and lowering the rate thus removes this barrier to an extent although 45% is not the lowest rate around by any means”, he added.

Share

Subscribe to get your daily business insights

Resources & Whitepapers

Why Professional Services Firms Should Ditch Folders and Embrace Metadata
Professional Services

Why Professional Services Firms Should Ditch Folders and Embrace Metadata

3y

Why Professional Services Firms Should Ditch Folde...

In the past decade, the professional services industry has transformed significantly. Digital disruptions, increased competition, and changing market ...

View resource
2 Vital keys to Remaining Competitive for Professional Services Firms

2 Vital keys to Remaining Competitive for Professional Services Firms

3y

2 Vital keys to Remaining Competitive for Professi...

In recent months, professional services firms are facing more pressure than ever to deliver value to clients. Often, clients look at the firms own inf...

View resource
Turn Accounts Payable into a value-engine
Accounting Firms

Turn Accounts Payable into a value-engine

3y

Turn Accounts Payable into a value-engine

In a world of instant results and automated workloads, the potential for AP to drive insights and transform results is enormous. But, if you’re still ...

View resource
Digital Links: A guide to MTD in 2021
Making Tax Digital

Digital Links: A guide to MTD in 2021

3y

Digital Links: A guide to MTD in 2021

The first phase of Making Tax Digital (MTD) saw the requirement for the digital submission of the VAT Return using compliant software. That’s now behi...

View resource