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Darling was told two-thirds ‘will dodge’ new 50p tax rate

We keep on saying that people are mobile but land is fixed and cannot be hidden or destroyed. This means that  a tax on the rental value of land cannot be avoided or evaded. But Britain’s politicians and civil servants can’t get the message. A pre-Budget “modelling” exercise conducted by the Treasury had forecast that 69 per cent of those hit by the new 50% top income tax rate – to come in next year – would find ways of avoiding it. Yet ministers pressed ahead with the measure anyway.

Senior Tories said that the revelation was final proof that the introduction of the 50p tax was purely “spiteful politics” and a tax on the rich, and not simply a “necessary” revenue-raising measure as ministers had claimed.

A Treasury source admitted it was clear a large majority of wealthy individuals would make use of a wide range of schemes which would prevent them falling into the new 50p top rate. It is designed to bring in £2.4 billion a year by 2012-13. He said: “Our estimates suggest that 69 per cent of those affected by the new 50p rate will avoid or evade paying at least some of the tax.” The 50p tax rate is attacked today by two of Mr Brown’s business ambassadors – Lord Jones and Sir Richard Branson – who were appointed to promote Britain overseas. They told this paper that the 50p rate was borne out of a “thirst for revenge” – comments which are certain to be embarrassing for the Prime Minister.

Daily Telegraph articles here and here