To ask Mr Chancellor of the Exchequer, what assessment his Department has made of the potential merits of abolishing the 50p income tax rate.
19 January 2018
The estimated impact of the 50p rate of tax was set out in the HM Revenue and Customs report “The Exchequer effect of the 50 per cent additional rate of income tax”:
This report showed that the 50p rate was a distortive and economically inefficient way of raising revenue and it did not raise what was expected. It raised at best only £1 billion and at worst could have cost the Exchequer. This is considerably less than the £2.5bn which was expected when introduced by Labour.
There has been no new evidence to suggest the conclusions of this report were incorrect.