Taxation: Income Tax

House of Lords written question – answered on 11th March 2013.

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Photo of Lord Ashcroft Lord Ashcroft Conservative

To ask Her Majesty's Government what is their assessment of the level of the top rate of income tax that would deliver the maximum return to the Exchequer.

Photo of Lord Deighton Lord Deighton The Commercial Secretary to the Treasury

Page 51 of The Exchequer Effect of the 50% Additional Rate of Income Tax1 report published by HM Revenue and Customs alongside Budget 2012, sets out the assessment of the level of the top rate of income tax that would deliver the maximum return to the Exchequer.

The report states that the estimated revenue-maximising rate of tax for those with incomes over £150,000 is between 45% and 50%, and that the Exchequer impact of varying the rate close to this level is relatively low.

1 http://www.hmrc.gov.uk/budget2012/excheq-income-tax-2042.pdf

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