The Exchequer Effect of the 50 Per Cent Additional Rate of Income Tax

March 2012

Author:

HM Revenue and Customs (HMRC)

Publisher:

TSO (The Stationery Office)

Price: £16.00

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'The Exchequer Effect of the 50 Per Cent Additional Rate of Income Tax' is one of the accompanying documents to the 2012 Budget (listed below) and examines the impact to the Exchequer of the 50% additional rate of income tax, introduced on 6 April 2010.

The report seeks to provide the first comprehensive ex-post assessment of the additional rate yield using a range of evidence including 2010-11 Self Assessment returns. Analysis shows that there was a considerable behavioural response to the income tax rate change, including a substantial amount of forestalling, with an estimated £16 to £18 billion of income brought forward to the 2009-10 to avoid the tax increase. The net result of such actions is that the underlying yield from the additional rate was much lower than forecast.

The report also describes how the impact of introducing the additional rate may extend well beyond the Exchequer, with the view that higher tax rates make the tax system less competitive and therefore less attractive to establish a business.

The publication is divided into six chapters with three annexes.

Extent	56 pages	ISBN	9780108511516
Size	A4	Price	£16.00
Format	Paperback	Published	21 Mar 2012
Availability	In Stock: 1 - 2 days	Delivery	Delivery options and charges