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One in ten rich ‘pay less than 20% tax’

by: IFAonline
  • 16/04/2012
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Almost one in ten people earning over £10m per year pays less than the 20% basic rate of income tax, according to Treasury figures.

Data released by the government showed that 6% of £10m-plus earners paid less than 10% in tax while another 3% paid less than 20%.

Fewer than three-quarters of high earners paid more than 40% in income tax, according to figures quoted by the BBC.

“There are currently millionaires paying a lower tax rate than ordinary taxpayers,” a Treasury spokesperson said.

The Treasury said it released the figures to show that government plans were needed to prevent very wealthy people from paying less tax than low-earners.

Existing proposals include limiting the tax relief on charitable donations.

Under the plans, previously uncapped tax reliefs – including on charitable donations – would be capped at £50,000, or 25% of a person’s income, if that was higher, from 2013.

But that idea has been criticised by Labour and others, who argue it could put some people off giving large sums to good causes.

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