Nick Clegg planning ‘tycoon tax’

Crackdown would target hundreds of big earners avoiding paying levy. Picture: PA
Crackdown would target hundreds of big earners avoiding paying levy. Picture: PA
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MILLIONAIRES who avoid paying levies on their wealth would be targeted under a new “tycoon tax” being proposed by Lib Dem leader Nick Clegg.

Speaking ahead of his speech at the party’s conference today, the deputy prime minister said many top earners were avoiding tax by employing an “army of lawyers and accountants”.

Clegg signalled he is ready to remove opposition to axing the 50p top rate of income tax – a move that Tory backbenchers and business leaders have demanded – on condition the wealthiest pay their fair share.

He is proposing a new minimum rate for the highest earners, which it is thought could be between 20 and 30 per cent of their wealth.

The Lib Dem leader said he believes hundreds of millionaires currently pay tax at a rate of less than 20 per cent.

It comes after prospective US Republican presidential candidate Mitt Romney admitted he was paying just 13.9 per cent tax on his earnings.

Clegg said: “You hope that kind of thing doesn’t go on in this country. So I looked into it. There are hundreds of people earning millions per year who are barely paying 20 per cent tax, forget 40 per cent, forget 50 per cent, forget 30 per cent. They are not even paying 20 per cent. Therefore, I think it’s time that we look at what I call a tycoon tax. If you’re earning millions per year, if you’re able to pay an army of lawyers and accountants to basically pick and choose what tax you are paying,”

But Chris Leslie, MP, shadow Financial Secretary to the Treasury, said: “Few people will take Nick Clegg’s latest bluster on tax fairness seriously. He is negotiating how to cut the 50p top rate of tax for the richest 1 per cent while slashing tax credits by £73 per week for working couples on the minimum wage.

And he is the man who campaigned against a regressive rise in VAT but then announced a VAT hike just weeks after becoming deputy prime minister.”

Clegg had earlier told party members to “stop looking back” and start “shouting our achievements from the rooftops” at a conference rally.The party leader said it was time to “move on” from damaging rows over the NHS and tuition fees.