One in 10 high earners pay too little tax

Stat of the day: One in 10. The number of people paying less than the 20% basic rate of income tax, according to Treasury figures. MT reckons Osborne was hoping for a more damning figure...

by Rebecca Burn-Callander
Last Updated: 09 Oct 2013

The government has picked over the accounts of the nation's high earners and the results are in: 6% of £10m-plus earners paid less than 10% in tax while another 3% paid less than 20%. All in all, just over 20% of high earners paid more than 40% in income tax. 'There are currently millionaires paying a lower tax rate than ordinary taxpayers,' a Treasury spokesperson told the BBC.

Or, to argue it the other way, over 70% of high earners are paying over 40% of their income to the Treasury.

This data has been released to add weight to Chancellor George Osborne's argument that super-rich are not contributing enough to the UK economy. His latest wheeze involves capping charitable donations at £50,000, or 25% of a person's income if that is a higher figure, to prevent wealthy individuals donating large sums to pseudo-charitable causes in order to avoid paying tax.

But releasing these new tax figures could be an own goal for the government. For while many wealthy individuals have been finding ways to dodge tax, some 73% were paying their fair share. But these law-abiding tax-payers are now receiving a rather nice tax cut in the latest Budget - from 50% to 45%. That's not going to reduce the deficit, is it George?

And the fact remains that while one in 10 of the super-rich are avoiding tax, nine out of 10 aren't. Something for the rich-bashing politicians to mull over...

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