That 50 p tax rate

Rock star Sting has avoided paying 50p income tax on £20million of his earnings by giving himself a bumper payout, it was revealed today.

The singer and poverty campaigner saved himself up to £2million just before the rate was raised, his latest filings with Companies House show.

Accounts for Sting\’s firm, Steerpike (Overseas) Limited, disclose he earned £20.045million in the calendar year 2009.

The massive payout – which pushed his company into a loss of £20.49million – came ahead of the imposition of the 50p tax rate in April last year.

It meant he was legally able to avoid £2million in income tax – paying £8million at the 40 per cent rate rather than £10million at the 50 per cent rate.

But in the previous accounting periods and in the year after he paid himself just £60,000.

It certainly brings forward revenue but does it in fact increase it?

5 comments on “That 50 p tax rate

  1. 1. Is it legal ?
    2. Would Ritchie approve?
    3. If it’s legal, is it anybody’s business but his?

  2. @GOM:
    1) Yes.
    2) No.
    3) RM wants everyone’s business to be RM’s business.

    I’ve been saying this for ages – wait til Jan 2012. The tax revenue figures will be sh1te. Take Sting for example. He paid a huge sum of tax in 2009/10. Therefore his payments on account for 2010/11 would be large too. That will all have to paid back come Jan 2012, when the figures for 2010/11 are finalised.

  3. So what you’re saying Tim is that you won’t pass any judgement on the 50p tax band’s efficiency until after this tax year?

    If the first year’s take is larger by making the second smaller then it won’t be until year three a roughly accurate account can be taken.

  4. the technical effects are as described by Jim for this fiscal year – on the assumption that people will have been able to shift income into 09/10. If they continue to keep themselves below the 50% level, it will take a few years for the effect on the tax take to work through – Jan 2013 for the final impact on fiscal year 2011/12, Jan 2014 for the final impact on 2012/13

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