Accountants have warned that the Treasury is likely to miss out on billions of pounds worth of potential revenues as both individuals and businesses find means of getting around the new higher rate of tax.
Under the conditions of the government's latest Budget, the rate of income tax for those with annual incomes above £150,000 has been increased to 50 pence in the pound.
However, while the chancellor Alistair Darling has stated his belief that this move will help to boost the government's coffers, Mike Williams, the director of personal tax at the Treasury, has warned that only around 30 per cent of the possible total income may be raised through the move, due largely to people changing their behaviour to avoid the higher rate.
Supporting this belief, Angela Beech, a tax partner with accountancy firm Blick Rothenberg, told the Times: "Some of our clients are already talking about leaving the country, while others are looking to retire early or cut their hours to reduce their income."
This follows on from last week's report by the Office for National Statistics, which revealed that the UK economy shrank by 1.9 per cent in the first quarter of 2009.
