Nigel Farage's flagship tax pledge, promising to cut the rate of tax for higher earners to 35p, will actually help the richest taxpayers most, experts have said.
The proposal to introduce a 35p income tax rate between £42,285 and £55,000 was included by the party in a widely trumpeted list of '100 reasons to vote Ukip", released on Wednesday with just 100 days to go before the general election. The party said it would end up "taking many public sector workers out of top rate of tax".
However, experts pointed out that the proposal would help the richest 25% of Britons most, and may actually penalise the moderately well-off at the expensive of the even richer.
Peter Davis a senior tax lawyer at the City law firm gunnercooke, told the Huffington Post UK: “The proposal sounds like it may not have been fully thought through. Currently earnings between £31,865 and £42,285 are taxed at 40%. Ukip might be suggesting that tax on this slice is reduced to 20%, or they might be suggesting that tax on this slice remains at 40% and then goes down to 35% for those who earn over £42,285 - which would be illogical at best. More information is needed, including cost, which they don’t seem to be supplying at the moment.”
“As the average public sector earnings are around £30,000 per year, Ukip’s proposal appears to help only those earning significantly more than the average in that sector. Therefore the proposal would benefit some in the top 25% of earners, but would be hard to justify to the general public.”
Chas Roy-Chowdhury, head of tax at the Association of Chartered Certified Accountants (ACCA), said: “When it comes to the introduction of a 35p tax rate, it is true that the more you earn, the more you’ll potentially save. For the very highest earners, this could clearly lead to very significant reductions in tax.
"However, the introduction of a 35p rate will also benefit many ‘ordinary’ people who perhaps wouldn’t be expected to be paying higher rates of tax. For example, there are thousands of teachers, doctors and other public sector workers, especially in metropolitan areas, who are currently working under the 40% rate."
This is not the first time Ukip has been accused of offering tax cuts that would help the well-off most, after its "blue-collar platform" was panned as "windbaggery and spin".
Ukip had mooted moving where the 40p rate income tax kicks in to £45,000, and abolishing income tax for those on the minimum wage.
But former Treasury official James Meadway, now senior economist at the New Economics Foundation, said the proposals would be a "social catastrophe" if implemented.
"Moving the top rate threshold up will clearly benefit those at the top: for comparison, if you earn over £45,000 a year, you’re in the top 11% of earners. So they will be the only ones benefitting from this," he said.
10 Policies You Had Forgotten Ukip Had Made
Taxi drivers must wear uniforms(01 of10)
Open Image ModalFor those who see a black cab with an illuminated sign saying 'TAXI' on it - and aren't sure whether it's a taxi - Ukip had you covered. When Andrew Neill put this to Farage on The Daily Politics in January, saying: "You favour a compulsory dress code for taxi drivers". Farage said: "Do we?" The policy didn't actually make it into the 16-page manifesto but was mooted by a "discussion group" that fed into Ukip policies, then policy chief David Campbell Bannerman told HuffPost UK. (credit:Anthony Devlin/PA Archive)
Ban the burkha! (Well, in some places)(02 of10)
Open Image ModalIn the section about 'Restoring Britishness', the manifesto pledged to "tackle Islamic extremism" by banning the wearing of the burkha or veiled niqab in public buildings and "certain private" ones. "Ukip opposes multiculturalism and political correctness - aiming to create a single British culture embracing all religions and cultures," it said. (credit:Anthony Devlin/PA Archive)
Shield our children from Al Gore's 'propaganda' (03 of10)
Open Image ModalEurosceptics and climate change sceptics appear to go hand in hand - Ukip say they wanted to abolish the Climate Change Act and ban Al Gore's Oscar-winning documentary An Inconvenient Truth from our schools, calling it "global warming propaganda". It also pledged to stop funding the UN panel on climate change and fund the Met Office "according to forecast accuracy". But they did have a green side... (credit:ASSOCIATED PRESS)
Get us all to drive electric cars(04 of10)
Open Image ModalThe manifesto said it would "incentivise and support" the use of electric road vehicles. (credit:John Walton/PA Archive)
A 'proper' Treason Act(05 of10)
Open Image ModalYeah, that's right - a "proper" one. Suck it, traitors. The act would be to prosecute British citizens found guilty of attacks on "the British people or armed forces". Beyond that, there isn't much detail. (credit:Alastair Grant/PA Wire)
Boot camps for young offenders(06 of10)
Open Image ModalYoung people consistently in trouble with the law were to be sent to "boot camp" to stop them "spiraling into a life crime". Ominously, that is all the manifesto has to say on the subject. It also pledged to double the number of prison places, presumably in case the camps didn't work. (credit:Jeff Moore/Jeff Moore)
Safeguard British measurements(07 of10)
Open Image ModalFarage wasn't Ukip leader at the time of the 2010 general election but we detect his fingerprints on this. His party pledged to "safeguard" imperial measurements like the pint and the mile from being "undermined" by Brussels. So, Farage won't have to order "half a litre of ale," (or worse, lager) any time soon. (credit:Steve Parsons/PA Wire)
Triple the size of the border staff(08 of10)
Open Image ModalThe Border Agency needed to be tripled in size to around 30,000 employees, in order to enforce Ukip's proposed new requirement that every non-UK citizen's entry and exit to the country be recorded. (credit:Steve Parsons/PA Wire)
Return to grants for students(09 of10)
Open Image ModalUniversity students are an unlikely target demographic for the eurosceptic party. Nonetheless, they said they would return to the old student grant system and scrap students loans which are leaving them in "heavy debt" If only those thousands of students who voted for the Lib Dems had known... (credit:Johnny Green/PA Wire)
'English-only' days at parliament(10 of10)
Open Image ModalBloody Scots, coming down here, taking up their duly elected places in the House of Commons. On "English-only" days, the MPs from Scotland, Wales and Northern Ireland would be required to go home and perform the devolved duties of the regional assemblies - whose existing members they would replace. (credit:Steve Parsons/PA Wire)