UK Budget to cut top tax rate to 40%
UK chancellor George Osborne is set to make a cut to the top rate of income tax when he presents the country’s Budget next week.
Osborne (pictured) is set to cut the tax rate from 50% to 40% despite concerns the move will paint the Conservative party he belongs to as protectors of the rich.
In return for supporting the measure, UK government coalition partner the Liberal Democrat party is pressing for a large increase in the ‘personal allowance’ for those in work and a commitment to a so-called ‘mansion tax’. A personal allowance in the UK gives tax breaks to individuals.
A preliminary study conducted by tax department HM Customs & Excise for the UK Treasury, due to be published next week, is expected to show the 50% rate is bringing in hundreds of millions, rather than billions, of pounds.
An earlier Treasury study assumed it would raise £2.6bn. Before 2010, the top rate had been at 40p since 1998.
This article was first published on IFAonline