Farewell to the 50p tax rate – at gain to a few and great cost to millions

Posted on

This is the last day of the 50p tax rate.

In 2012 I estimated this should raise £6.7 billion in revenue if avoidance had not been given a chance to defeat it - as it was. I have never seen reason to change that estimate and the fact that HMRC admitted more than £6 billion of avoidance took place in the year it was introduced - leaving only a billion or so raised - seemed to confirm I was right.

Now these are estimates, of course. I know that. But the number happened to concur with the Treasury's own logic in 2009. And to be candid, on this occasion I think they were right too.

Of course the whole tax has not been foregone: the cut is to 45p, not back to 40p from whence the increase came, but the loss is still billions of pounds in revenue a year for absolutely no gain to this country at all, but at an enormous cost to many.

At this moment the justifications for this cut are threadbare, and will remain so for a long time to come.