David Cameron has announced that government plans to abolish the higher income tax rate of 50p have been cancelled amidst the decision to extend the public sector pay freeze until 2015.
The 50p income tax rate applies to individuals earning a yearly salary on or above £150,000 a year.
Cameron defended his decision to scrap plans of waiving the 50p rate of income tax, saying:
“When you’re taking the country through difficult times and difficult decisions, you’ve got to take the country with you.
“I think that means permanently trying to make the argument that what you’re doing is fair.”
Although the Prime Minister admitted that he was not in assent with the new taxes on wealth it is thought that abandoning the 50p tax rate would in fact make Cameron and Chancellor George Osborne look like they were favouring the interests of the wealthy.
Cameron has also given strong reason to believe that a ‘mansion tax’ will not be introduced on high-value properties.
In an interview with Sky News Prime Minister, David Cameron, said that the 50p income tax rate “is temporary”, and that “we don’t want high marginal rates of tax”.
He said that the 50p tax rate needed to be looked at and that if it is not “raising a lot of revenue”, then “there will be question marks all over it”.
HM Revenue and Customs (HMRC) is said to be publishing a report after 31 January that will present the 50p tax rate as having already been successful in raising hundreds of thousands of pounds revenue.
On the BBC’s The Andrew Marr Show, David Cameron announced that the Government are to impose new rules that will require companies to provide details of their executives’ pay, subsequently allowing company shareholders legal authority to deny permission of pay packages they deem excessive.
Cameron also announced that there have been discussions on the idea of introducing a limit on the pay executives receive in relation to a percentage of a company’s average salary.
Cameron told the BBC that an executives “pay going up and up and up when it is not commensurate with the success companies are having” is wrong, and that payments “unrelated to success” and “big rewards” for failure makes “people’s blood boil”.
Kevin Kinsella Jnr, of KinsellaTax, said:
“What a surprise not scrapping the 50p tax rate, did anyone really expect that? Sometimes the government, whoever it is, really do think the general public are stupid, come on.”
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