While the Institute of Fiscal Studies has argued that the 50pc top rate of income tax does not raise much revenue after increased avoidance is taken into account, the new HMRC figures indicate otherwise.
They may also suggest one reason why the Government has recently put plans to scrap the top rate on hold.
Err, no, we don\’t actually know yet.
About 5m people have yet to file self-assessment tax returns.
And that\’s why.
We know absolutely that some people brought forward income from the first year of the 50 p rate to the last year of the 40 p one. Sting, for example, took a £10 million dividend from his management company in that last 40 p year.
What we don\’t know is how many people took how much money in that manner. Something we won\’t in fact know until those 5 million tax forms are filed and evaluated. For those 5 million forms are for the first year of the 50p.
It is possible (but of course not certain) that we will see a fall in income from the previous year and thus a fall in tax revenues from the previous year. As the effects of that bringing forward of income fall out of the calculations.
Now, whether or not the 50 p rate raises money or not depends upon those forms. Which is going to be interesting to find out.
But what is truly stupid, entirely insane, is to be making the decision about the 50 p rate before those forms are filed and evaluated so that we find out whether the rate raises tax revenues or not.
My bet is that it doesn\’t, but I\’m just as eager as everyone else to find out whether I\’m right or not.