The estimate of extra revenue if incomes at £100,000 or above were charged at 50 per cent. would be around £7.9 billion for 2008-09. This figure excludes any estimate of behavioural response which could be significant given the scale of the change.
This estimate is based on the 2005-06 Survey of Personal Incomes projected forward using Budget 2008 assumptions and includes changes announced in Budget 2007.
In Budget 2007, the Government announced an increase the age-related allowances for taxpayers aged 65 or over of £1,180 above indexation from April 2008. This is worth £236 a year to people benefiting in full from the age-related allowances, greater than the £232 a year maximum loss from the withdrawal of the 10p rate.