“The 50 per cent tax hike on those earning over £150,000, as well as reduction of tax relief on pension savings for high earners, has been announced in ignorance of the effect this will have on wealth creation in the UK," says Rose, who runs investment newswire Growthwire. "Not everyone in this income bracket is a minister, local authority CEO or in the financial services. At least half of those in this top two per cent of earners are people who risked their own capital and assets, as entrepreneurs, to start new companies and create wealth and employment." He says Darling has grossly underestimated the contribution made by Britain’s four million entrepreneurs to the economy. "They create half of GDP and employment, at considerable risk to their own financial well-being and, often, their health and relationships," says Rose.
"Three-quarters of all start-ups fail within three years, and there is no relief or compensation for the risks they take, and this new tax structure will be a further disincentive. The Tories should not in any way feel themselves ‘put on the spot’ by this totally political move from the Chancellor. Indeed, they should argue to retain the current tax structure for those who have built successful businesses.”
The managing director of MyVoucherCodes, Mark Pearson, adds: “The income tax rise does nothing to encourage successful business people to remain in the UK and with that there comes a risk of jobs in the UK being lost to investment in overseas employees” For a blow-by-blow account of the announcements in today’s Budget, check out Real Business’s Twitter page.