England Lost two-thirds of its Millionaires due to 50% Tax



Run Away!

In the 2009-10 tax year, more than 16,000 people declared an annual income of more than £1 million to HM Revenue and Customs.

This number fell to just 6,000 after Gordon Brown introduced the new 50% top rate of income tax shortly before the last general election.

The figures have been seized upon by the Conservatives to claim that increasing the highest rate of tax actually led to a loss in revenues for the Government.

It is believed that rich Britons moved abroad or took steps to avoid paying the new levy by reducing their taxable incomes.


George Osborne, the Chancellor, announced in the Budget earlier this year that the 50% top rate will be reduced to 45% from next April.

Far from raising funds, it actually cost the UK £7 billion in lost tax revenue.

“Labour now needs to admit that their policies resulted in millionaires paying less tax and come clean about whether they would reintroduce this failed policy if they were in power.”

Mr Osborne argued earlier this year that the 50% rate was deterring entrepreneurs from coming to Britain.

The Chancellor wanted to scrap the top rate altogether for those earning more than £150,000 a year – and return to the previous system of a basic and top rate of tax.

This was blocked by the Liberal Democrats without a new mansion tax being introduced.

Labour will hold a parliamentary debate today to criticise the decision to reduce the top rate, which Ed Miliband, the Labour leader, has described as a “tax cut for millionaires”.

Senior Coalition figures are locked in negotiations over next Wednesday’s Autumn Statement which will set out government tax policies for next year.

The Tories wish to freeze out-of-work benefits. The handouts usually rise in line with inflation, which has meant that the unemployed are likely to receive a higher rise than most workers can expect.

It is understood that the Lib Dems will only allow the benefits freeze if taxes on the rich are increased.

The Lib Dems have long cherished an increase in taxes for multi-million pound properties. David Cameron has ruled out changes to council tax.