50 Pence tax rate

'Clever' Accountants 'spirit' earned income into Capital Gains or dividends which attract a lower rate of taxation.  There is a price to pay for this accountancy service but it was/is worthwhile.  If you lower the income tax rates then higher rate tax payers are more likely to declare more of their income as earned, so, less money for accountants and more money for the treasury.  Lawson was wise to this and harmonised tax rates, but the previous administration re-profiled the tax structure to 'encourage, high rate earners to channel 'income' through CGT and dividends.  The current administration did raise CGT rates but there is still a small advantage in exploiting this avenue.  The advantage of taking income as dividends still remains as it is taxed at a lower rate and does not bare NI contributions either. Now you might see the relevence of the current administration wishing to combine NI and Income Tax as it would close the loophole, but there would be unintended consequences for others in society.