Cut tax relief for top earners and put £10bn into economy, TUC urges

Published on Sunday 15 November 2009 21:48

THE government has been urged to cap the amount of tax relief given to high earners, with claims that the move could raise £10 billion a year.

The TUC said people who had fared best during the economic boom years should now pay a fairer share of tax.

The union organisation pressed for a limit on the tax relief available to those earning more than 100,000 a year.

A study by the TUC showed that 3.1 per cent of taxpayers received 31 per cent of all tax relief. The report said people earning between 70,000 and 100,000 claimed average tax allowances of 4,500, so setting a limit of 5,000 for those who earned more than 100,000 seemed "fair".

The TUC general secretary, Brendan Barber, said: "When the time comes to close the deficit, when there is a strong recovery, it will be only fair to ask those who did well out of the boom years to make a fair contribution.

"Putting a 5,000 cap on the tax relief that can be claimed by those earning over 100,000 is not just a sensible way of raising funds, it would also remove much of the scope for tax avoidance on income and make the tax system fairer.

"The super-rich have got better at getting out of paying tax and this would close a whole set of loopholes at a stroke."