500 of Britain’s entrepreneurs warn that Tax revenue is set to tumble.
Over five hundred entrepreneurs today called on the Chancellor to axe the 50p tax in the forthcoming budget.
In a letter to The Daily Telegraph 537 entrepreneurs have warned that:
â€¢ Revenue. “The 50p tax is set to reduce government income”.
â€¢ Fairness. “Penalising high earners through an unfair, politically-motivated tax puts populist politics before sound economics.”
â€¢ Growth. “Repealing the 50p tax would be a good demonstration of the Chancellor’s wish to celebrate British entrepreneurialism, stimulate British industry and contribute to the Government’s growth agenda.”
The letter comes a week after released government figures show that income tax payments from those paying by self-assessment dropped by Â£509 million in January 2012 compared to 2011. Many observers attributed this to the introduction of the 50p tax as most other taxes produced higher revenues over the same period.
The signatories, predominately from small and medium sized enterprises (SMES) from across the UK, are businessmen and women from a wide spectrum of businesses including manufacturing, exporters, pharmaceuticals, cleaning services, hair salons, care homes, digital media, skip hiring services, construction, security installation, plumbing and engineering.
They have said that the scrapping of the controversial tax rate “would be a good demonstration of the Chancellor’s wish to celebrate British entrepreneurialism, stimulate British industry and contribute to the Government’s growth agenda.”
Tony Stein, Director at Canterbury Care, said “The 50p tax rate is a disincentive to job creation. Times are hard and reducing the resources available to entrepreneurs to reinvest in new business is the wrong outcome for the country.”
Andrew Denny, Managing Director of Fix-a-Form International, said “I am simply trying to create wealth for me, my kids and my loyal staff. Why are high earners treated like they have committed a crime and should be punished?”
Martin Jones, Operations Director at Covpress Ltd, said “The 50p tax is unfair and unjustified.”
Mr Maurice Shearman, Proprietor of Ace Moulding Services Ltd, said “This tax prevents me from expanding or investing into my business. With our expertise, the potential for growth is very good. But we are greatly hindered by the tax.”
Mr Chris Jenkins, Managing Director of BWS Security Systems Ltd, said “Quite simply since the 50% tax band was introduced I have stopped taking a salary or dividend that takes me into this higher tax band. I am living off my savings and reduced my over-all spending. Basically, I have chosen not to pay this higher level of tax. The loser in this case is HMRC. First, they miss out on income tax revenue. And second, my reduced spending means I am contributing less VAT. My advice to the Government is simple: stop killing the goose that lays the golden egg.”
Mr Andrew Seward, Managing Director of Cityspace Management Ltd, said “By removing the incentive to earn, you remove the desire to expand and employ.”
Dr James Milne CBE, Chairman and Managing Director of Balmoral Group Holdings Ltd, said “I have built up a world leading position in our field. We employ about four hundred people. I work twelve plus hours a day. I find paying the 50p tax demoralising. Sometimes I feel ‘why bother?’.”
Mr Barry Anysz, Divisional Director at Investec Wealth & Investment, said “The tax acts as a disincentive to working hard and going the extra mile as well as reducing potential disposable income or saving for retirement. Ultimately, the economy will suffer as a result of this pernicious tax rate.”
Mr Paul Fox, Chief Executive of Micheldever Group Ltd, said “Our directors are all shareholders and all personally invested in the business when we purchased it in 2006. We therefore all service large mortgages and not only invest in our business but also provide employment for 1400 staff. This has grown from 450 in 2006. What kind of an incentive is it to have to pay in the order of 55% (when NI and loss of personal allowance are considered) to help drive the economy as we do.”
Mr Charlie Mullins, Managing Director of Pimlico Plumbers, said “Ultimately, the 50p tax is self-defeating and will end up hurting the whole of society, not just the rich. I don’t mind paying my fair-share of taxes. We all want to live in a fairer society. This is what makes Britain great. But the 50p tax is excessive and anti-entrepreneurialism.”
The 50p tax affects nearly 320,000 taxpayers earning over Â£150,000, 1% of the total number of taxpayers. The top 1% of taxpayers are forecast to contribute nearly 28% of the total income tax revenue raised by the Government, according to HMRC figures.
Recent data has shown that the UK has fallen from 4th to 95th place in the World Economic Forum’s Global Competitiveness Report from 1997 to 2011. The UK now has the highest top (central government) rate of Income Tax among the ten largest economies in the world. Experts have predicted that the 50p tax is set to cost the Government at least Â£500 million in lost revenue this year.