The IFS have published their budget\u00a0commentary.<\/p>\n
I've looked at the 50p tax rate commentary<\/a>. It says:<\/p>\n - No\u00a0administrative data on how much actually paid until tax returns for 2010\u201411 submitted in January 2012<\/p><\/blockquote>\n So the claims made are not based on actual data.<\/p>\n It goes on:<\/p>\n - In Budget 2011, Chancellor asked HMRC to produce a report on how much 50p rate was raising in time for this Budget<\/p><\/blockquote>\n What's clear is we did not get it. Instead we got a figure based on 2009\u00a0analysis:<\/p>\n - HMT\u2019s estimate from 2009 implied significant reduction in income resulting from the change: static costing \u00a36.8 billion<\/p><\/blockquote>\n So first, HMRC did not report on tax return data per se, they\u00a0instead\u00a0made a guess on what IFS thinks an inadequate base of what tax\u00a0might\u00a0have been paid if 40p rate had been still in operation - and they\u00a0describe\u00a0the data set used as 'the best they could do with information available' but\u00a0clearly\u00a0imply that does not mean it is reliable.<\/p>\n So all we actually got was an HMT guess, and nothing\u00a0like facts.<\/p>\n The IFS note two possible responses:<\/p>\n Genuine reductions in income: working less hard, retiring early, leaving the UK<\/p>\n \u2014 Would expect these to reduce expenditure and hence indirect tax revenues as well as income tax revenues<\/p><\/blockquote>\n In other words this footprint should appear in more than income tax. There's no sign it did.<\/p>\n Second possible response was avoidance. They say:<\/p>\n Avoidance responses: shifting income to different time periods, converting to capital gains, shifting income between spouses Seems that the latter is what was found.\u00a0All they can say for sure is:<\/p>\n - \u00a0Overall, incomes among those with incomes above \u00a3150k increased\u00a014% in 2009\u201410 but fell 25% in 2010\u201411 So there was massive avoidance but that does not mean it would be repeated.<\/p>\n Unclear to what extent this was responsible for significant drop in income in 2010\u201411 In other words, alternative interpretations are viable. I\u00a0suggest\u00a0mine remains so. And I also suggest they\u00a0remain\u00a0within the\u00a0plausible\u00a0range for 2011\/12, which is the year they were estimated for.<\/p>\n It will be curious to see what the data eventually says. I am very sure it will not be that the 50p rate raised anything as little as \u00a3100 million - or that incomes fell to suggest that was a significant behavioural response. But by then it will be too late.<\/p>\n","protected":false},"excerpt":{"rendered":" The IFS have published their budget\u00a0commentary. I’ve looked at the 50p tax rate commentary. It says: – No\u00a0administrative data on how much actually paid until
\n\u2014 Would probably not reduce indirect tax revenues
\n\u2014 Moving income forward from 2010\u201411 to 2009\u201410 particularly important when examining 2010\u201411 data: clear incentive to do this when tax rise pre-announced<\/p><\/blockquote>\n
\n\u2014 Particularly for dividend income: grew 78% among this group in\u00a02009\u201410 and then fell 73% in 2010\u201411
\n\u2014 Incomes would have been much lower in 2009\u201410 without 50p rate,\u00a0and much higher in 2010\u201411<\/p><\/blockquote>\n
\n\u2014 Using reasonable assumptions, HMRC find other considerable behavioural responses that reduced incomes
\n\u2014 But model is so imprecise that results are not very informative in themselves<\/p><\/blockquote>\n<\/div>\n
Read the full article…<\/em><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[127,1],"tags":[],"class_list":["post-14743","post","type-post","status-publish","format-standard","hentry","category-budget","category-uncategorized"],"_links":{"self":[{"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/posts\/14743","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/comments?post=14743"}],"version-history":[{"count":0,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/posts\/14743\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/media?parent=14743"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/categories?post=14743"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/tags?post=14743"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}