Asked by: Stephen Hepburn (Independent - Jarrow)
Question to the HM Treasury:
To ask Mr Chancellor of the Exchequer, how many people have paid less tax as a result of the recent reduction in the top rate of tax.
Answered by David Gauke
Estimates of the number of additional rate income tax payers are published in HMRC’s tax statistics, table 2.1. https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/306826/Table_2.1.pdf
As set out at Budget 2013, the cost of reducing the additional rate of income tax to 45 per cent from 50 per cent is estimated at around £100m per year. The costing’s account for substantial behavioral responses associated with changes in top marginal tax rates and have been verified by the independent Office of Budget Responsibility (OBR).
The Government believes it is neither efficient nor fair to maintain a tax rate that is not effective at raising revenue from high earners and risks damaging growth.