The chancellor is under increasing pressure to scrap the 50p rate of tax, after claims that revenue has dropped since it was introduced. The higher rate of tax applies to income exceeding £150,000, but figures indicate that wealthier taxpayers may be dodging the tax. According to recently released data, the tax due after completion of self-assessment tax returns in January 2012 was £10.35 billion. In January 2011, the tax due was £500 million higher, at £10.86 billion.

George Osborne was waiting for the figures as evidence to show whether the 50p tax rate would be useful. The tax returns which were completed for 2010-11 provided the first full year’s evidence of tax yield following the introduction of the 50p rate. According to the Centre for Economics and Business Research, the figures are proof that the higher rate of tax is affecting tax receipts. George Osborne is under increased pressure to drop the highest rate of tax, as fears that entrepreneurs will move from the UK increase.

Other figures recently published indicate that wealthy people are taking steps to avoid paying the 50p rate. Although payments of income tax had increased by 2.4 percent, the figures for Corporation Tax indicated a 9.3 percent increase, suggesting that some executives of companies had paid themselves a large bonus or dividend before the 50p rate came into force.

Until the assessments by HMRC are completed, a low cost accountants will maximise revenue in compliance with HMRC and the latest legislation.

The Accountancy Partnership

We are a national firm of accountants that specialise in small and medium sized businesses. We have been trading since 2006 and have more than 1,000 clients across many different industries and areas of the UK.

Our staff has a wealth of experience and qualifications from the major accountancy and tax associations such as ACCA, AAT, ICPA, IFA, FTA.

Our clients receive many benefits including:

• Unlimited help and advice throughout the year — We offer our clients unlimited ongoing support for their business. We often find that new clients have lots of questions about running a business and about how the tax system works. We have heard every possible question many times before and therefore can offer new clients the very best advice.
• Free representation in the event of a HMRC investigation — If one of our clients is selected for a HMRC investigation then we will offer representation at no additional cost. We fight our client’s corner and ensure that our clients do not pay a penny more than necessary on the conclusion of the investigation.
• Dedicated Accountant — Our clients have their own dedicated accountant in which they can contact anytime. We feel this is important because it means our accountants can get to know their clients and build good relationships. All our accountants work from our main office and we never outsource work.
• Recommendations — With every piece of work we carry out for clients we look for recommendations that can be made. These recommendations can be anything from structuring the business in the most tax efficient way to recommending an insurance quote to reduce costs for clients.
• Free business guides — When a new client joins us we send them a free business guide. These guides outline in simple terms how the tax system works along with key dates and deadlines. Most clients find the guides to be extremely useful.
• Financial advice — We have a very reputable financial advisor who helps our clients to structure their finances in a way that best suits their needs. We always look out for circumstances where we think clients can benefit from financial advice and add it to their recommendations.

Please click here for a quotation for your business. Please also feel free to contact us if you have any questions or would like further information; 0800 0430 007, info@theaccountancy.co.uk.

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Disclaimer: The information contained in these articles is of a general nature and no assurance of accuracy can be given. It is not a substitute for specific professional advice in your own circumstances. No action should be taken without consulting the detailed legislation or seeking professional advice. Therefore no responsibility for loss occasioned by any person acting or refraining from action as a consequence of the material can be accepted by the authors or the firm.