Businesses call for 50p top tax rate to be scrapped

 

Charlie Mullins, Pimlico Plumbers founder, said the 50p tax rate was stopping firms from expanding and had seen the government lose £500m in the amount of tax collected.

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More than 500 business leaders have called for the 50p top rate of tax to be scrapped in next month's Budget.

In a letter to the Daily Telegraph, they said it was reducing government income and damaging the economy.

The entrepreneurs accused Chancellor George Osborne of putting "populist politics before sound economics".

Mr Osborne has said the 50p rate is a temporary measure and has asked officials to assess how much extra revenue it actually brings in.

There is speculation that wealthy tax payers find ways of avoiding it.

'Awkward position'

The letter, from the owners of 537 small and medium-sized businesses, said: "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.

"We believe the richest should help the poorest in society. 1% of taxpayers are forecast to contribute nearly 24% of income taxes.

"But penalising high earners through an unfair, politically-motivated tax puts populist politics before sound economics."

The letter adds: "The result is that the 50p tax is set to reduce government income and damage the economy, the public services and charitable giving."

Tricky decision

One of the signatories, Tony Stein, director at Canterbury Care, said the rate was a disincentive to job creation.

He said: "Times are hard and reducing the resources available to entrepreneurs to reinvest in new business is the wrong outcome for the country."

Business leaders are funding a campaign against the tax rate of 50p in the pound.

Last September, the campaign organised a letter signed by a group of leading economists.

BBC chief economics correspondent Hugh Pym says the decision of when to end the 50p rate will be tricky.

Some people argue that when there is a public sector pay freeze it is wrong to be helping the richest in society.

'No timetable'

Shadow chief secretary to the Treasury, Rachel Reeves, said now was not the time to do away with the 50p rate.

"When millions of families and pensioners on middle and low incomes are being squeezed by the VAT rise and cuts to tax credits, cutting taxes only for the richest 1% cannot be the right priority now," she said.

"But these business owners are right to call on the government to take action to stimulate growth and jobs in our economy.

"That's why Labour is calling on the chancellor to use the almost £1bn unspent from his failed national insurance holiday to give a tax break to all small firms taking on extra workers."

The rate, introduced by Labour, is levied on earnings above £150,000 a year.

A Treasury spokesman said: "We have said we regard 50p as temporary and have asked HMRC to report on its effectiveness. We have not set out a timetable for any change in policy."

Sir Martin Sorrell, chief executive of the global advertising firm WPP, told BBC Radio 4's Today programme: "The government is trying to reduce the rate of increase in spending, or even cut spending, and in these circumstances it's understandable that taxes would be at higher levels than in more normal circumstances.

"Having said that, if you asked my personal view, I would like to see the tax rate lower."

 

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  • rate this
    -1

    Comment number 175.

    Now look here, dear left wingers. We, the rich, pay more taxes then you earn (if you do earn at all). It is us, who provide you with your benefits, healthcare, free education etc. So why is it that you are trying to make our lives harder? Envy? Or laziness? Or both?Stop moaning and start working harder to achieve the same. And when you did achieve read left wing comments again and see how you feel

  • rate this
    +1

    Comment number 174.

    They only want to make their selves even richer while still putting people on the dole.Do they propose,like dear Maggie done,40p off the top rich and 3p for the lower class( 60p to 40p and 25p to 23p).Now you have to say that is really fair is it not.Why do these greedy people still want even more money when the rich ,even now,are still getting richer. If you don't like it in this country- leave.

  • rate this
    +4

    Comment number 173.

    The top 1% of taxpayers contribute about 30% of tax.
    The top 50% of taxpayers contribute about 90% of tax.
    Could someone explain what is meant by the much used (and abused) word 'fair'. Never mind 50% tax, its the 40% tax paid by almost anyone who has had moderate career success and is working their rocks off to earn £42k gross that gets me (BTW you can nearly get that on housing benefit!)

  • rate this
    +78

    Comment number 172.

    The problem is not the tax rate, it's the rate of tax avoidance. Close loopholes first, THEN raise tax rates if you need to.

  • rate this
    +1

    Comment number 171.

    124.
    TEMPUS FUGIT
    "There are a multitude of planes, trains and ferries leaving the UK by the minute, what's keeping you here?"

    Good news for you, I will be leaving shortly, not for finacial reasons but quality of life. All due taxes having been paid without avoidance or evasion and indeed more to be paid in my new home . You dont have to waste your pity on me.

  • rate this
    +8

    Comment number 170.

    Dear 500 Business leaders,
    Thank you for your lovely letter re 50% tax rate however you offer no evidence that anyone but you will benefit from reducing it. Why dont you stop whinning and get on and spend the £6500 you get after tax each month. No one belives for a second you would give the £1250 the tax man has to charity.

  • rate this
    -16

    Comment number 169.

    The one percents are bleating here & I am told that in their arrogance they are proud of their title 'The one percent.'

    What needs to be done is bring them down to nil percent before this country can get back on it's feet. The one percent are the culprits & now they should be made to cough up!

    Milliband needs to catch up with soon to be socialist France & quickly. Give Cameron a good bashing

  • rate this
    0

    Comment number 168.

    118.eddyba
    Still from reading the comments it's obvious why some will never have to worry about paying 50% or even 40% tax rate.

    yes we're less enroached in a smug sense of self-importance and entitlement

    143.Boro Jonesy
    good riddance.

  • rate this
    +4

    Comment number 167.

    As a 50% tax payer I have had to make sacrifices as my fixed net income has gone down significantly. I have even had to turn down the heating by three degrees on my indoor swimming pool.

  • rate this
    +12

    Comment number 166.

    Many of these so called "wealth creators" are simply parasites living off the real wealth created by people who actually work for a living. Recent studies show that the rich and influential are more likely to lie and to have psychopathic tendencies. There is no shortage of wealth in this country, the issue that it is mostly concentrated at the top from whom proportionately less tax is paid.

  • rate this
    -5

    Comment number 165.

    The laziness and greed in this country is now endemic; the sense of entitlement entrenched. Some of the envy drenched comments are sickening. Endlessly spiralling demands on wealth generators to fund increasingly large sections of society perfectly capable of fending for themselves. They are simply too poorly educated, and so use to apologism they see no need. It's all the "toffs" fault innit?

  • rate this
    +3

    Comment number 164.

    I do like the phrase 'wealth creators' which was invented by the wealthy. As the gap between the rich and poor is increasing, but the sale of luxury goods is also increasing (LVMH posting record profits) the only people who the wealth creators create wealth for is themselves.

    This is tantamount to Turkeys voting to ban Christmas.

  • rate this
    +1

    Comment number 163.

    When are the rich going to stop bleating on about how they are being unfairly taxed, these people are not having to think about how they are going to feed their family or buy school shoes. The sorts of figures we are talking about would be pocket change for these people if you are on a salary of £200K you are only going to have to pay an extra £5000 for these people that's a small price to pay.

  • rate this
    +1

    Comment number 162.

    To be fair, people earning over about £42k pay much less national insurance on earnings over that amount. The upper earnings level - where the 12% rate drops to 2%, was lowered this year. And let's face it NI is now another income tax, but one which is regressive, i.e. hits the lower paid hardest.

  • rate this
    +4

    Comment number 161.

    It's always those most able to pay that dodge the most tax. They are not unable to pay, they are unwilling to pay. It is not that the tax rate is too high, it is that they are too selfish.

  • rate this
    +3

    Comment number 160.

    Top tax rate payers calling for a cut in the top tax rate?

    I for one am shocked.

    /sarcasm

  • rate this
    0

    Comment number 159.

    Its about time a really debate took place on tax as we are all in together i would suggest its is only right that those who earn the most should pay the most i would like to see the following rates off tax on over a 100k 50 p in the pound 120k 60 p in the pound 150 k 70 p in the pound 200k 80p in the pound if this lead to a mass departure off the rich good riddance

  • rate this
    +3

    Comment number 158.

    If some one can't live on more than 10 times my salary without paying a little extra tax, then they must be doing something wrong and won't get any sympathy from me.

  • rate this
    -1

    Comment number 157.

    I was in favour of keeping the 50%. However if you include NI and compare tax rates in europe we have the highest rate. So lets scrap it. We need to able to compete against our nearest neighbours.

  • rate this
    +2

    Comment number 156.

    150.CTDavies
    119. Rebecca Riot
    ''I agree with my sister.''

    Nobody cares abour your views, or your sister's views. They are usually quite badly informed.

    Nobody cares what's going on in France. If anything France should be taking orders from here.

    And nobody cares for your leftist ideology.
    -
    Actually, I do, so that's at least one person who cares, anyone else??

 

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