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Chancellor considers scrapping 50 per cent income tax rate

The 50 per cent income tax rate could be scrapped or reduced in next week’s Budget, according to reports.

The Guardian quotes Government sources saying Chancellor George Osborne “has been intellectually persuaded” of the case to scrap the rate.

The FT reports that the Chancellor is considering reducing the highest rate if income tax to 45 per cent after the Liberal Democrats dropped their demands for a mansion tax and instead proposed an alternative approach which leader Nick Clegg has billed as a “tycoon tax”.

The FT reports that the Chancellor is unlikely to be opt for a minimum rate of tax for the wealthiest people, as suggested by the Lib Dems at their spring conference, but could go for a collection of anti-tax avoidance measures branded as a “tycoon tax”.

However, the Telegraph reports that sources close to Osborne say claims that Clegg has accept a cut in the top rate in exchange for tax cuts for low earners and and tightening of tax rules are “wild speculation”.

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