George Osborne slashes 50p tax rate

Budget briefcaseChancellor George Osborne has slashed the top rate of tax for the biggest earners, claiming that the controversial 50% rate was damaging the economy.
He pressed ahead with the move - unpopular with some Liberal Democrats - after revealing that an official report by the taxman had found it was raising "next to nothing".

50p Tax Rate Cut: George Osborne's Budget

He also reduced proposed cuts to child benefits paid to the better off.

But he increased the threshold at which everyone starts paying tax to £9,205, claiming millions of working people would be £220 a year better off as a result.

The cut in the top rate of income tax to 45p in the pound for all income over £150,000 from April 2013 was countered with a hike in stamp duty on homes worth over £2 million from 5% to 7%.

The Chancellor also confirmed a crackdown on various tax loopholes used by the rich including a 15% stamp duty rate on homes held through companies.

Overall, Mr Osborne claimed his measures would raise five times more from the wealthy than the 50% top rate introduced by Labour. But Labour leader Ed Miliband said the Budget meant millions would pay more while millionaires paid less, saying: "It is a millionaires' budget that squeezes the middle."

The Chancellor has been besieged with calls from the motoring lobby for a cut in fuel duty as forecourt prices have soared to record highs. But Mr Osborne ignored them, declaring: "I do not propose to make any further changes to the fuel duty plans already set out."

He also dealt a blow to smokers saying that duty on all tobacco products would rise by 5% above inflation - slapping 37p on a packet of cigarettes from 6pm.

The Chancellor also signalled that millions of workers may have to work longer before they can retire. Mr Osborne told MPs: "I can confirm today that there will be an automatic review of the state pension age to ensure it keeps pace with increases in longevity."

Huffington Post Budget 2012

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