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

'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 Out of Print: but may be available to order Availability help (opens in new window) Delivery Delivery options and charges
 

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Economic and Fiscal Outlook: March 2012 - Cm. 8303

 

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Budget 2012 Policy Costings

 

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