GEORGE OSBORNE has been pressed to slash income tax in the upcoming budget after revealing an £8bn boost to the Treasury caused by his cuts to the top rate of income tax
The chancellor used HMRC statistics to reveal to the House of Commons that cutting the top rate from 50p to 45p in 2013 has raised £8bn during the first year of its implementation.
The chancellor first announced the cut in the top rate of income tax during his first budget in 2012, which prompted the Labour party to predict that the cuts would cost £3bn and would be a gateway for high-earners to gain a £10,000 tax cut.
This is not the first time that Osborne has witnessed an increase in income tax receipts. In June 2015, the ONS revealed that income tax receipts for the month increased 2.5% to £11.5bn, the highest level since records began.
“Under this government the richest pay a higher proportion of income tax than under the last Labour government,” Osborne addressed to parliament.
Income tax receipts from highest earners up £8bn to 28% of total paid in 1st year of 45p top rate, @HMRCgovuk stats released today show
— George Osborne (@George_Osborne) March 1, 2016
“Indeed we have just had numbers out this morning from HMRC which for the first time show the income tax data for the year 2013/14, which is when the 50p rate was reduced to 45p.”
Osborne yesterday said that the HMRC stats defy “the predictions made by the Labour party” and that Britain has “lower, competitive taxes that are paid by all”.
With the budget looming, Conservative MP’s have called on Osborne to cut income tax, with one Tory MP arguing that it’s time middle-class taxpayers “got a break”.
David Davis, MP for Haltemprice and Howden, told The Telegraph: “The people who have carried the biggest burden of increased taxes since 2008 have been middle income middle Britain.
“It is time they got a break. If he is finding money they should be up there.
“What this [cutting the 50p rate] demonstrates is that what we argued at the time – when you cut higher rates of tax you get a greater return for the public purse.
“You have to decide whether you want to punish high earners or capitalise them.”
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The firm says that the U-turn 'does not alter the need for a fundamental review of the way we tax work' and that the current tax system is in need of reform