'We’re capping benefits and these figures clearly show why it’s fair to cap tax reliefs for the wealthy as well,' says Treasury
Six per cent of taxpayers with an income over £10m paid income tax at an average rate of less than 10% in 2010/11, according to HM Treasury data. Almost three quarters paid an average rate above 40%.
The Treasury released the figures – set out in the table below – in response to a backlash against the government’s proposal to cap income tax reliefs at the greater of £50,000 or 25% of income. The figures revealed ‘startling tax avoidance by [the] super wealthy’, according to a Daily Telegraph headline.
The proposal will be the subject of consultation in the summer. A Treasury spokesperson said: ‘There are currently millionaires paying a lower tax rate than ordinary taxpayers. This is the system we have at the moment, but the government is committed to making it fairer. We’re capping benefits and these figures clearly show why it’s fair to cap tax reliefs for the wealthy as well.’
Proportion of individuals reporting various average tax rates by total income category (2010/11):
Income £
100k- 150k
150k-250k
250k- 500k
500k-1m
1m-5m
5m-10m
Over 10m
Average tax rates above 40%
0%
6%
73%
81%
80%
81%
72%
30%-40%
67%
77%
18%
11%
10%
8%
12%
20%-30%
24%
13%
5%
4%
5%
4%
8%
10%-20%
8%
3%
2%
2%
2%
3%
3%
Under 10%
1%
2%
2%
2%
3%
4%
6%
Source: HMRC and HM Treasury
The Treasury has estimated that in 2010/11, 200 taxpayers had an income of more than £10m, 400 had an income of between £5m and £10m and 10,000 had an income of between £1m and £5m. On this basis, 12 taxpayers with an income exceeding £10m paid income tax at an average rate under 10%.
‘We don't think it's entirely fair that the tax system as currently designed does mean that there are some very wealthy individuals who are essentially able to take themselves out of the income tax system,’ Exchequer Secretary David Gauke told the BBC’s Today programme this morning.
'We’re capping benefits and these figures clearly show why it’s fair to cap tax reliefs for the wealthy as well,' says Treasury
Six per cent of taxpayers with an income over £10m paid income tax at an average rate of less than 10% in 2010/11, according to HM Treasury data. Almost three quarters paid an average rate above 40%.
The Treasury released the figures – set out in the table below – in response to a backlash against the government’s proposal to cap income tax reliefs at the greater of £50,000 or 25% of income. The figures revealed ‘startling tax avoidance by [the] super wealthy’, according to a Daily Telegraph headline.
The proposal will be the subject of consultation in the summer. A Treasury spokesperson said: ‘There are currently millionaires paying a lower tax rate than ordinary taxpayers. This is the system we have at the moment, but the government is committed to making it fairer. We’re capping benefits and these figures clearly show why it’s fair to cap tax reliefs for the wealthy as well.’
Proportion of individuals reporting various average tax rates by total income category (2010/11):
Income £
100k- 150k
150k-250k
250k- 500k
500k-1m
1m-5m
5m-10m
Over 10m
Average tax rates above 40%
0%
6%
73%
81%
80%
81%
72%
30%-40%
67%
77%
18%
11%
10%
8%
12%
20%-30%
24%
13%
5%
4%
5%
4%
8%
10%-20%
8%
3%
2%
2%
2%
3%
3%
Under 10%
1%
2%
2%
2%
3%
4%
6%
Source: HMRC and HM Treasury
The Treasury has estimated that in 2010/11, 200 taxpayers had an income of more than £10m, 400 had an income of between £5m and £10m and 10,000 had an income of between £1m and £5m. On this basis, 12 taxpayers with an income exceeding £10m paid income tax at an average rate under 10%.
‘We don't think it's entirely fair that the tax system as currently designed does mean that there are some very wealthy individuals who are essentially able to take themselves out of the income tax system,’ Exchequer Secretary David Gauke told the BBC’s Today programme this morning.
