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Income Tax Fifty Per Cent Band Looks to Be Staying

When a new government takes office there is always some question over whether all the measures adopted by the previous government will stay in place.

I have noticed this has occurred recently with the fifty per cent top band of Income Tax. The highest band was brought in by Labour before they lost the General Election, but it would seem as if the new coalition government has every intention of keeping it in place, at least for the time being.

Many people may not even be aware there is a top band of this amount, since it has been calculated that only about one per cent of the population is eligible to pay it. It is relevant only if you earn more than £150,000 a year.

I suspect that it has been kept in place to reap in a bit more cash into government coffers in these hard times. The government has said a lot lately about everyone paying their fair share towards reducing the deficit, and as such they would be going against this if they were to abolish the highest rate.

No firm announcement has been made regarding the highest rate of tax, but it is clear that we won’t see it disappear any time soon. The same could be said, I think, of any kind of tax cuts, although I shall be watching closely to see how this progresses in the future. The one per cent of the country that is eligible to pay it won’t be happy that the rate is staying however.

If you have any questions or concerns about the rate of tax you are paying, contact us for further advice now at St Matthew.





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