Budget 2012: 50% income tax to be scrapped

Chancellor George Osborne is to cut the 50% income tax rate to 45%.

In cutting the rate, the chancellor claimed that the measure had only ever been seen as a “temporary measure”.

Citing a report by HM Revenue & Customs, Osborne says it had raised only £1 billion as £16 billion was shifted into other tax domiciles.

Osborne says: “The tax rate is higher not just than America, but also major European countries like France, Italy and Germany.”

He adds: “No chancellor can justify a tax rate that damage the economy and raises next to nothing.”