March 1st, 2012

Coming soon – a tax rate of 2,265%?

On the 6 April 2012 some UK tax payers could face a marginal rate of tax that makes the highest 50% tax rate look generous.

Under current proposals a household in which one earner is a higher rate tax payer will lose any entitlement to child allowance. In practice this would mean that £10 of earnings per annum in the higher tax band would attract income tax of £4 and cause £2,261 of benefits to be lost (for a family with 3 children). This adds up to an effective tax rate of 2,265%.

The Budget on 21 March 2012 will hopefully make the policy clearer but there seems to be little indication that the Chancellor has any plans to pull the proposal. Watch this space.

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HMRC

by
Managing Director

Jonathan trained as a chartered accountant with Price Waterhouse (now PWC) in Liverpool before becoming a small business services manager for Grant Thornton in Warrington. He also spent three years as the financial controller for Brookside and Hollyoaks (not that he ever mentions it!).

Jonathan is recognised as a specialist in the entertainment industry and is often called upon to provide training courses and seminars for media professionals. He's also a bit of a technology geek and has been recognised with the accountancy industry as one of the most progressive accountants in the UK.
Outside of work Jonathan is very proud to be the Treasurer of the Tim Parry Johnathan Ball Foundation for Peace and to be on the Council of the Liverpool Institute of Performing Arts (LIPA)

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