During an appearance on BBC Radio 4's Today programme, the Chancellor revealed he has formally asked HMRC to delve into the figures and statistics coming from the 50 percent tax rate band.
The push for the removal of the top rate band of tax, which people earning more than £150,000 are susceptible to, is becoming more vocal in recent weeks. We reported only a few weeks ago of London Mayor Boris Johnson's ideas about cutting top rate tax as well as reducing national insurance
Chancellor Osbourne puts forward the following arguments for removing the tax:
- It was put in place by the last Labour Government, not by the coalition Government.
- People are working around the tax by emigrating or using complex but legal tax evasion methods.
- There is debate to whether the top rate band is actually raising a notable amount of money for the Treasury, therefore the tax in itself may be 'economically inefficient'.
No investigation can be concluded until people start sending in Self Assessment Tax Returns, starting from October 31st 2011 and culminating 31st January 2012.
A conclusion by HMRC will therefore be returned to the Chancellor by the start of the new tax year, 6th April 2012.