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UK Opposition Leader Hints At Return Of 50 Percent Tax Rate

by Robert Lee,, London

12 November 2014

Labour leader Ed Miliband has said that he cannot "in all conscience" say that his party would not restore the 50 percent income tax rate, should his Party form the next Government.

Answering questions following a speech to the Confederation of British Industry's (CBI's) Annual Conference, Miliband said that the decision from the Coalition Government to abolish the 50 percent rate had been directed at "the richest in our society."

"If it is a source of agreement amongst us that there are massive challenges facing lower- and middle-income people, I could not in all conscience say that if we get into Government we will keep that tax cut in place. It is fair if we want to fund our National Health Service (NHS) that these people pay a bit more," Miliband said.

Between 2011 and 2013, the 50 percent rate was charged on all income over GBP150,000 (USD238,265). It was reduced to 45 percent in April 2013.

Research published recently by international accountants UHY Hacker Young suggested that high earners in the UK would pay 24 percent more than the current global average if the Labour Party succeeds in reintroducing the 50 percent rate.

According to Mark Giddens, Partner at UHY, the move would be "something of a backwards step at a time when other countries are rolling back their top rates of tax and could put the UK at a significant disadvantage to its rivals."

Miliband did nevertheless underline his party's intention to maintain a competitive tax regime. He told the CBI that Labour is "committed to maintaining the most competitive regime in the G7."

The Chancellor, George Osborne, made this his goal when he entered office and has reduced both the top rate of personal income tax, and also the headline rate of corporation tax to 21 percent, with a further cut to 20 percent scheduled for next year, during his term.

TAGS: tax | corporation tax | United Kingdom | tax rates | tax reform | individual income tax

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