View more on these topics

Top-rate tax could be cut to 40% in return for forfeiting relief

A policy proposal will be submitted by Shadow Treasury chief secretary Angela Eagle to cut the top rate of tax to 40 per cent in exchange for the removal of all allowances.

At the Labour conference in Liverpool last week, Tax Research UK founder Richard Murphy suggested those earning over £150,000 should pay 40 per cent tax instead of 50 per cent but forfeit all allowances and reliefs.

Murphy said: “We need to remove all allowances and reliefs for those earning over £150,000 in the UK and then we could not bother with the 50 per cent, we could cut it to 40 per cent.”

Speaking to Money Marketing, Murphy said the idea has not been fully costed, but he believes it will bring in more money from taxpayers. He said: “The move would definitely result in a higher tax take and would also very likely mean we could cut the taxes of the 90 per cent of taxpayers this does not affect.”

Eagle said she would submit the proposal to the policy review, which is expected to publish results by next year’s Labour conference.

Recommended

Test your flexibility

Flexible drawdown was a major introduction in the post-retirement market, removing restrictions for over-75s and widening income options. This was partly a reaction to historically low annuity rates but also recognition of changing income requirements in retirement. With the promise of unrestricted access to crystallised pension funds, providers have been cautious. In particular, the costs […]

Pomeroy calls for generic products

Financial Inclusion Taskforce chair Brian Pomeroy has called on the industry to come forward with a range of generic products for consumers who will not have access to advice after the RDR. The Government has consulted on developing simple products and is expected to publish a response in the autumn. But, speaking at a fringe […]

Openwork in progress – how technology can prepare firms for RDR

As technology is crucial in helping large numbers of advisers with the RDR, I make no apologies for the fact that the tools being delivered to assist advisers with these challenges are becoming a recurring theme in this column. Last week, Openwork walked me through the client segmentation and business cashflow tools it is now […]

Tyrie: new regulators must not be used for social engineering

Treasury select committee chairman Andrew Tyrie says the new financial regulators must not be used as instruments of social engineering. He made the call in a paper for the Centre for Policy Studies thinktank, It’s the economy, where he also attacked the Government’s growth policy as “inconsistent” and “incoherent”. In it he says much of […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment