George Osborne is facing increased pressure as the Budget approaches to cut the 50p rate of tax. Industry leaders are supporting the calls to scrap the controversial higher tax rate, while Labour party members and trade unions are firmly opposed to the abolishment of the 50p tax rate.
According to the trade unions and Labour politicians, it shouldn’t be a priority to cut the rate of tax for the one percent of taxpayers who are wealthy. Recently released data showed that the Chancellor is ahead of his schedule to reduce the budget deficit, being ahead by £7 billion. The 50p rate of tax is more likely to harm the economy, according to more than 500 owners of small businesses, with claims being made by supporters that the government may find that tax receipts are lower as a result of the higher tax rate.
David Ruffley, Conservative MP said:
“If you punitively tax hard work, aspiration and wealth creation, you will get less of all three. It sends the message the UK is no longer open for business.”
Supporting this statement, Simon Walker of the Institute of Directors says that businesses would be encouraged by the tax rate being scrapped, increase tax receipts and ease the burden on people with lower incomes. Trade unions argue that the Chancellor should concentrate on creating jobs and reinstating services which have been cut.
As the arguments rage on, outsourcing to a low cost accountants will minimise tax bills in a legitimate manner, while maximising tax reliefs and allowances.
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