Financial Times FT.com

UK Budget 2009

Think-tank casts doubt on fiscal forecast

By Vanessa Houlder

Published: April 24 2009 03:11 | Last updated: April 24 2009 03:11

“Huge uncertainty” over the response of high earners to their new 50p tax rate was highlighted by the Institute for Fiscal Studies on Thursday, which said the reform could actually cost the government money.

Robert Chote, director of the independent think-tank, said an examination of what happened when higher rates were last changed, in the 1980s, suggested that revenue could be lost, rather than gained, “as people actually declare less income for tax”.

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