Clegg demands £3 billion rich tax

Good news for the wealthy is that the 50p top rate of tax could go under a deal between the Liberal Democrats and the Conservatives.

Bad news for the wealthy is that the Lib-Dems are demanding another levy on the rich if the Tories want to get rid of the 50p rate before raising the starting threshold for paying income tax to £10,000 to help the less-well-off.

Even worse news for the wealthy is that the Lib-Dems want the new levy, possibly a mansion tax or land tax, to raise as much as the 50p rate was intended to bring in not what it has actually added to Treasury coffers.

The 50p rate was expected to raise £3 billion a year.

But a review by Revenue & Customs is expected to find that many rich people have managed to avoid the top rate of tax and it has raked in far less than predicted.

So, if the Lib-Dems get their way, any rejoicing by the wealthy at getting ridding of 50p may be short-lived once they realise that many of them may be paying more under a new rich tax.

Nicholas Cecil