50p tax rate: UK arrivals lounges will be booming...
Chris Sanger, head of tax policy at Ernst & Young comments:
“The UK’s arrivals lounges are likely to be booming next year as entrepreneurs respond to a far more positive message from the Chancellor. In his speech, the Chancellor has matched his reforms of the business tax environment by addressing the much maligned 50p rate. By removing this deterrent, the Chancellor has put the substance behind his rhetoric; the UK is open for business.
“HMRC’s report showed that the first year of the 50p rate generated far less for Treasury coffers than expected, demonstrating the pervasive image that it had portrayed of the UK. The Chancellor pointed out that a rate of 45% brought in broadly the same amount of revenue, without all the negative baggage.
“The delay of a year (it takes effect from April 2013) is somewhat surprising, especially as he criticised his predecessor for forestalling. In practice, many people will now plan on 45% but we can still expect income to be deferred until after the 50p rate reaches its death day.”