Britain to end 50 percent tax rate

London, England, United Kingdom (AHN) – British Business Secretary Vince Cable said Sunday that the coalition government will end the 50 percent tax rate. The abolition is the result of an order by Chancellor George Osborne for a review of tax on top earners last week.

Osborne said the 50 percent tax rate on Britons earning more than $225,000 (GBP 150,000) was temporary. The review order caused speculation that the rate would be reduced as early as 2013. Labour introduced the tax rate in 2010 as a temporary measure. Osborne agreed not to keep it permanent because it has the potential of doing more damage on the British economy.

However, despite the end of the 50 percent tax rate, Cable said the government would introduce a mansions tax for the wealthiest Britons to contribute more to government coffers. The tax seeks to ease accusations that the government is softening taxes for the rich, while the rest of the country had to tighten their belts because of the austerity measures.

To show their displeasure over the coalition government’s economic plans, about 500,000 Britons demonstrated Saturday.

While ending the 50 percent tax rate, the coalition government launched Monday the Start Up Britain initiative that put in place a new 50 percent tax relief rate of up to $150,000 (GBP 100,000) investment in start-up businesses. The move aims to encourage more Britons to open their own enterprises.

At the launch, 60 new companies took the challenge, which entitled them to special offers and assistance of up to $2,250 (GBP 1,500) per company. The assistance would come from 39 venture capitalists, including Sir Ronald Cohen – who was a major donor to the Labour Party – and the founders of Silicon Fen and Lastminute.com.

The venture capitalists’ participation was an offshoot of the budget introduced last week, which relaxed rules and permitted investors to contribute twice as much to new business or up by $1.5 million (GBP 1 million) each. The new rules permitted start-up companies to receive a maximum of $15 million each – five times the previous allowable maximum of $3 million (GBP 2 million).

View full post on All Stories