Barclays boss Marcus Aigus has warned that his firm is finding it more difficult to keep senior staff in London due to the UK’s 50p top rate of income tax. This news adds to growing fears that at 50 per cent income tax is at or beyond the vertex of the Laffer curve. In other words, the tax either raises no money for the Treasury or actually causes it to collect less money than it would have done without the 50p rate. The reason for this is simple: 50 per cent of nothing is a lot less than 40 per cent of the income those senior staff would have earned if they’d have stayed in London. And then there’s the VAT, duties and other taxes the Treasury won’t collect. TaxPayers’ Alliance Research Fellow Mike Denham explains it all in more detail here.
[caption id="" align="alignright" width="210" caption="Beyond the vertex"]
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The loss of revenue to the Treasury has been estimated at £800m by economist David McWilliams of the Centre for Economics and Business Research. Stuart Adam of the IFS produced a graph indicating that total revenue, including indirect taxes, will fall by a similar amount. However, research by HMRC uncovered by TaxPayers’ Alliance director Matthew Sinclair in ‘How to cut public spending (and still win an election)’ shows the real loss may be even greater. TaxPayers’ Alliance calculations put the figure at up to £4.5bn. And none of this measures the cost to the economy of the distortions involved, beyond the loss of revenue to the Treasury.
The 50p top rate of tax is just one policy among thousands that make Britain’s tax system one of the world’s most complex and burdensome. To explain it all in their handbooks it takes Tolley’s Tax Guides an incredible 11,520 pages, more than double the number in 1997. To read all that out just once would take the world’s fastest reader five straight days without any breaks or sleep! Reforming and simplifying the system must be an urgent priority for the government to get Britain’s economy back on track. Unwinding all that incredible complexity will obviously take a lot of careful work, a mountainous task the 2020 Tax Commission has begun to scale and will be continuing over the coming year.Barclays boss Marcus Aigus has warned that his firm is finding it more difficult to keep senior staff in London due to the UK’s 50p top rate of income tax. This news adds to growing fears that at 50 per cent income tax is at or beyond the vertex of the Laffer curve. In other words, the tax either raises no money for the Treasury or actually causes it to collect less money than it would have done without the 50p rate. The reason for this is simple: 50 per cent of nothing is a lot less than 40 per cent of the income those senior staff would have earned if they’d have stayed in London. And then there’s the VAT, duties and other taxes the Treasury won’t collect. TaxPayers’ Alliance Research Fellow Mike Denham explains it all in more detail here.
[caption id="" align="alignright" width="210" caption="Beyond the vertex"][/caption]
The loss of revenue to the Treasury has been estimated at £800m by economist David McWilliams of the Centre for Economics and Business Research. Stuart Adam of the IFS produced a graph indicating that total revenue, including indirect taxes, will fall by a similar amount. However, research by HMRC uncovered by TaxPayers’ Alliance director Matthew Sinclair in ‘How to cut public spending (and still win an election)’ shows the real loss may be even greater. TaxPayers’ Alliance calculations put the figure at up to £4.5bn. And none of this measures the cost to the economy of the distortions involved, beyond the loss of revenue to the Treasury.
The 50p top rate of tax is just one policy among thousands that make Britain’s tax system one of the world’s most complex and burdensome. To explain it all in their handbooks it takes Tolley’s Tax Guides an incredible 11,520 pages, more than double the number in 1997. To read all that out just once would take the world’s fastest reader five straight days without any breaks or sleep! Reforming and simplifying the system must be an urgent priority for the government to get Britain’s economy back on track. Unwinding all that incredible complexity will obviously take a lot of careful work, a mountainous task the 2020 Tax Commission has begun to scale and will be continuing over the coming year.
[caption id="" align="alignright" width="210" caption="Beyond the vertex"]
[/caption]The loss of revenue to the Treasury has been estimated at £800m by economist David McWilliams of the Centre for Economics and Business Research. Stuart Adam of the IFS produced a graph indicating that total revenue, including indirect taxes, will fall by a similar amount. However, research by HMRC uncovered by TaxPayers’ Alliance director Matthew Sinclair in ‘How to cut public spending (and still win an election)’ shows the real loss may be even greater. TaxPayers’ Alliance calculations put the figure at up to £4.5bn. And none of this measures the cost to the economy of the distortions involved, beyond the loss of revenue to the Treasury.
The 50p top rate of tax is just one policy among thousands that make Britain’s tax system one of the world’s most complex and burdensome. To explain it all in their handbooks it takes Tolley’s Tax Guides an incredible 11,520 pages, more than double the number in 1997. To read all that out just once would take the world’s fastest reader five straight days without any breaks or sleep! Reforming and simplifying the system must be an urgent priority for the government to get Britain’s economy back on track. Unwinding all that incredible complexity will obviously take a lot of careful work, a mountainous task the 2020 Tax Commission has begun to scale and will be continuing over the coming year.Barclays boss Marcus Aigus has warned that his firm is finding it more difficult to keep senior staff in London due to the UK’s 50p top rate of income tax. This news adds to growing fears that at 50 per cent income tax is at or beyond the vertex of the Laffer curve. In other words, the tax either raises no money for the Treasury or actually causes it to collect less money than it would have done without the 50p rate. The reason for this is simple: 50 per cent of nothing is a lot less than 40 per cent of the income those senior staff would have earned if they’d have stayed in London. And then there’s the VAT, duties and other taxes the Treasury won’t collect. TaxPayers’ Alliance Research Fellow Mike Denham explains it all in more detail here.
[caption id="" align="alignright" width="210" caption="Beyond the vertex"]
[/caption]The loss of revenue to the Treasury has been estimated at £800m by economist David McWilliams of the Centre for Economics and Business Research. Stuart Adam of the IFS produced a graph indicating that total revenue, including indirect taxes, will fall by a similar amount. However, research by HMRC uncovered by TaxPayers’ Alliance director Matthew Sinclair in ‘How to cut public spending (and still win an election)’ shows the real loss may be even greater. TaxPayers’ Alliance calculations put the figure at up to £4.5bn. And none of this measures the cost to the economy of the distortions involved, beyond the loss of revenue to the Treasury.
The 50p top rate of tax is just one policy among thousands that make Britain’s tax system one of the world’s most complex and burdensome. To explain it all in their handbooks it takes Tolley’s Tax Guides an incredible 11,520 pages, more than double the number in 1997. To read all that out just once would take the world’s fastest reader five straight days without any breaks or sleep! Reforming and simplifying the system must be an urgent priority for the government to get Britain’s economy back on track. Unwinding all that incredible complexity will obviously take a lot of careful work, a mountainous task the 2020 Tax Commission has begun to scale and will be continuing over the coming year.