Risk of flight over tax on British high earners

THE British government hit its high earners with a new income tax rate of 45% for those earning more than £150,000 (€176,513).

Mr Darling said his proposals would help “prevent the recession deepening” but tax experts warned of the impact on Britain’s “wealth creators”, potentially driving them offshore.

Mr Darling also announced that no one earning under £20,000 will pay any more national insurance, which is a system of taxes and related social security benefits in Britain.

However, he did say that he proposes that from April 2011 to increase by half a per cent all rates of national insurance contributions for both employees and employers.

IN THE republic’s budget last month the Irish government slapped an income levy on the country’s workers which means it is taking €1 more out of €100 earned by every employees in the country.

A 1% levy will apply to gross incomes up to €100,100 per annum and a rate of 2% for pay above that amount. The levy will not apply to social welfare payments.

A 3% income levy on those earning above €250,000 a year was also introduced by the government.

It later made moves that it said will ensure that super-rich exiles will no longer be able to manipulate loopholes to avoid paying tax despite spending large amounts of time in Ireland.

Finance Minister Brian Lenihan moved to end the so-called Cinderella clause under which a visit was not recorded for tax purposes if the exile left before midnight.