A key reason for businesses to choose to locate in London is the availability of a deep skills pool. With London’s talent being drawn from all over the world, competitive personal tax rates are vital. Alongside the welcome reduction in the top rate of personal tax, London First is campaigning for greater use of dynamic modelling to ensure the behavioural effects of taxation are fully analysed and understood.
The introduction of the 50% top rate of income tax put London at a competitive disadvantage against other global cities. London First ran a comprehensive, evidence-backed campaign to support the reduction of this tax. Our pre-Budget letter to the Chancellor made the case for the reduction alongside an increase in the personal tax allowance.
We were delighted that the Chancellor announced that the top rate was to be reduced to 45% from April 2013.
When economic conditions allow, we would wish to see this rate reduced further to 40%.