Chancellor 'considering cutting 50p tax rate' in forthcoming Budget

16 Mar 2012

Chancellor George Osborne is considering abolishing the 50p top rate of income tax and is said to be discussing the issue with ministers today, ahead of next week’s Budget.

The 50p top rate of income tax was introduced in 2010 and applies to those earning in excess of £150,000 a year.

In the run-up to the Budget, Business Secretary Vince Cable had already suggested that the top rate could be replaced with an alternative tax on wealth, with one preferred option being a so-called ‘mansion tax’ on very expensive homes.

The Chancellor has faced increasing pressure in recent months to scrap the top rate of tax, with business groups arguing that it is restricting growth and damaging the economy.

While the introduction of the 50p rate was originally expected to generate more than £2bn a year, the level of actual revenue generated is understood to be much lower than this.

The 2012 Budget will be delivered on Wednesday 21 March. Visit our website for the latest announcements.