Budget 2012: 50p tax rate to be reduced to 45p

The top 50p rate of income tax is to be reduced to 45p from April 2013.

In the Budget report 2012, Chancellor George Osborne said the 50p rate, which is levied on taxable income above £150,000 a year, has damaged Britain’s competitiveness.

Sean Drury, tax partner at PricewaterhouseCoopers (PWC), said the move will be a positive step for multi-national organisations looking to move employees to the UK.

He added: “Confirmation the 50p top rate of tax will be reduced to 45p is a welcome step in the right direction for multinationals looking at the UK as a location for increased investment.

“The headline tax rate will result in a 9% saving for employers for a typical expatriate package, making it easier for employers to bring their global talent to the UK.

“Given all the positive work the government has done to create an attractive and stable corporate tax regime, it is good news the regime for senior employees could become equally competitive.”

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