Dennis the 'Bloody Peasant'
16th March 2012, 10:56
Chancellor of the Exchequer George Osborne is considering cutting the 50p top rate of income tax in next week's Budget, Whitehall sources have told the BBC.
Prime Minister David Cameron is to discuss the issue with senior ministers on Friday, the sources told our political editor Nick Robinson.
Labour introduced the rate in 2010-2011 for those earning more than £150,000.
It was a new rate, above the 40% rate, for the very highest earners.
The discussions are said to involve the so-called "Quad", which comprises Mr Cameron and Mr Osborne, as well as Deputy Prime Minister Nick Clegg and the Chief Secretary to the Treasury, Danny Alexander.
It is thought that in return for approving the tax cut, the Liberal Democrats will demand concessions, including alternative measures to tax the rich, as well as raised tax-free allowances for those in work.
In the past year there has been a concerted campaign by some economists and business people in favour of scrapping 50% tax rate.
They have claimed that it is a negative measure that deters entrepreneurship and investment, and that it would raise little extra tax anyway.
Last year the chancellor explicitly linked any decision on the matter to forthcoming HMRC figures, which will reveal how much extra tax has been raised in its first year of operation 2010-11.
When the 50% rate started, HMRC estimated that it would raise more than £2bn a year.
Latest estimates show that in the current tax year, 2011-12, there are likely to be 308,000 people paying the 50% rate (known as the additional rate). Some 3.74 million currently pay tax at the 40% rate.
BBC NEWS
Hmmm...Conservatives considering recuding the tax 'burden' on the rich...most unexpected
Prime Minister David Cameron is to discuss the issue with senior ministers on Friday, the sources told our political editor Nick Robinson.
Labour introduced the rate in 2010-2011 for those earning more than £150,000.
It was a new rate, above the 40% rate, for the very highest earners.
The discussions are said to involve the so-called "Quad", which comprises Mr Cameron and Mr Osborne, as well as Deputy Prime Minister Nick Clegg and the Chief Secretary to the Treasury, Danny Alexander.
It is thought that in return for approving the tax cut, the Liberal Democrats will demand concessions, including alternative measures to tax the rich, as well as raised tax-free allowances for those in work.
In the past year there has been a concerted campaign by some economists and business people in favour of scrapping 50% tax rate.
They have claimed that it is a negative measure that deters entrepreneurship and investment, and that it would raise little extra tax anyway.
Last year the chancellor explicitly linked any decision on the matter to forthcoming HMRC figures, which will reveal how much extra tax has been raised in its first year of operation 2010-11.
When the 50% rate started, HMRC estimated that it would raise more than £2bn a year.
Latest estimates show that in the current tax year, 2011-12, there are likely to be 308,000 people paying the 50% rate (known as the additional rate). Some 3.74 million currently pay tax at the 40% rate.
BBC NEWS
Hmmm...Conservatives considering recuding the tax 'burden' on the rich...most unexpected