It has been reported that almost two-thirds of the country’s millionaire earners left Britain when the 50p top rate of tax was introduced.
In 2009/2010 more that 16,000 people had declared an annual income of more that £1m to H M Revenue & Customs, but after Gordon Brown introduced the new 50p top rate of income tax shortly before the last election, numbers fell to 6,000 people.
It is understood the fall was due to rich Britons moving abroad or taking steps to avoid paying the high levy by reducing their taxable incomes.
Conservatives seized upon these figures and claimed that the increase in the higher tax rate led to a loss in revenues for the Government.
In the budget earlier this year, George Osborne, the Chancellor, announced that the higher rate tax would reduce from 50p to 45p and would be introduced in April 2013. Since his announcement, the number of people declaring incomes of more than £1m per annum has again risen to 10,000.
Despite the rise, the number of one million pound earners is still far below the recorded level at the height of the recession.
Harriet Baldwin, Conservative MP uncovered the latest figures and said “Labour’s ideological tax hike led to a tax cull of millionaires.”
“Labour now needs to admit that their policies resulted in millionaires paying less tax and come clean about whether they would re-introduces this failed policy if they were in power.”
Mr Osborne also argued earlier this year that the 50p rate was deterring entrepreneurs from coming to Britain. He also wanted to get rid of the top rate tax altogether for those earning more that £150,000 but this was blocked by the Liberal Democrats without a new mansion tax being introduced.