HMRC is due to publish a report soon that is expected to show that the Exchequer gathered in hundreds of millions of pounds extra during the first year the 50p tax rate was in operation.
David Cameron and George Osborne have now decided that, given the current economic climate, it will not be possible to abolish the top rate before 2015 at the earliest. There are concerns in government circles that abolishing the rate earlier will lead to accusations of pandering to the rich.
The tax’s impact on businesses will be assessed each year, and it will only be scrapped within the next three years if it is proven to be damaging the economy.
Meanwhile, research from Deloitte shows that retail administrations rose by 11% last year, despite the overall numbers of firms going into administration decreasing by 4%.
183 retailers were forced into administration last year, a rise of 18 on 2010. 42 retailers fell into administration in the last quarter of 2011, up from 33 in the third quarter.
Lee Manning, a partner at Deloitte, warned that we will probably see another spike in retail administrations in Q1 2012 as footfall declines after the New Year sales and more people turn to online shopping channels.
He went on to say that the consumer recession badly affected some of the well known household names last year; such as Barratts, Habitat and Oddbins, and this year will probably bring more of the same.