Ditch 50p tax rate, bosses tell Osborne

MORE than 500 business leaders called on the Chancellor last night to axe the 50p top rate of tax in the forthcoming Budget.

The leaders of some of Britain’s most successful small firms warned George Osborne he should ditch the ‘politically motivated’ tax on those earning more than £150,000 because it would ‘damage the economy’.

They pointed out that the entrepreneurs the Government wants to create jobs are being taxed at 58p in the pound once national insurance is considered.

Responding to Liberal Democrat calls for the rich to shoulder more of the burdens of austerity, the business leaders said the top 1 per cent of taxpayers already paid 28 per cent of income taxes.

They said: ‘ Penalising high earners through an unfair, politically motivated tax puts populist politics before sound economics. The result is that the 50p tax is set to reduce government income, and damage the economy, the public services and charitable giving.’

Their protest will fuel demands by Tory MPS for the Chancellor to slash the 50p rate, which is seen as a class-war measure introduced by Labour that does nothing to raise tax revenues because it

‘The sooner it is repealed, the better’

drives entrepreneurs abroad. The entrepreneurs added: ‘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. But 1 per cent of taxpayers are forecast to contribute nearly 28 per cent of income taxes.

‘Repealing the 50p tax would be a good demonstration of the Chancellor’s wish to celebrate British entrepreneurialism, stimulate British industry and contribute to the Government’s growth agenda. The sooner this tax is repealed, the better.’

Their comments, in a letter to The Daily Telegraph, come as figures suggest the 50p tax rate has been a flop.

In January, the tax take from people who do self-assessment returns dropped to £10.35billion from £10.86billion in the same month last year.

It confirms warnings from accountants that many wealthy people would do everything possible to avoid paying the top rate of tax.

For example, many executives decided to pay themselves a big bonus or dividend before it came into effect.