They're all in it together! Tory rich list are big winners from 50p cut

David Cameron, Boris Johnson – and George Osborne himself – will reap Budget rewards

Oliver Wright
Friday 23 March 2012 01:00
David Cameron: As PM he earns £142,500 but he also rents out his former home for up to £70,000. The tax changes are likely to save him £3,000 - £5,000 a year
David Cameron: As PM he earns £142,500 but he also rents out his former home for up to £70,000. The tax changes are likely to save him £3,000 - £5,000 a year

David Cameron and his wife Samantha are likely to save thousands of pounds in tax as a result of George Osborne's decision to scrap the 50p rate of tax. An analysis of their earnings suggests that the Camerons' could gain up to £5,000 a year as a result of the controversial tax cut for those who earn more than £150,000 a year.

At least five other Cabinet ministers are also thought to have personally benefited, along with the Mayor of London Boris Johnson.

There were also questions asked about George Osborne's claim yesterday that he will not be personally affected by the cut in the top rate of tax, which was 50p in the pound – but which he has cut to 45p.

On paper Mr Osborne would appear to have rental income from property that would push him into the highest tax bracket. However, it is possible that because the income was only declared in July he is not paying the 50p rate yet – but would have had to do so if it had remained in place. But Mr Cameron and his family are clear winners. Although he earns £142,000 as Prime Minister (below the 50p threshold), his salary is not his only form of income.

When he entered Downing Street Mr and Mrs Cameron began renting out their £2.7m house in Notting Hill, London. Estate agents have estimated that would net him around £50,000 to £70,000 a year (minus expenses and wear and tear) which would have to be added to his salary for tax purposes.

Taken with his £142,000 salary, that would give him a maximum income of £212,000, on which he would soon be paying 5 per cent less on £62,000 – a saving of around £3,000 a year.

Samantha Cameron may also benefit. Before the last election she was thought to be earning around £400,000 working as creative director of the upmarket stationers Smythson.

Since the last election she has cut her commitments – but if she was earning half that amount she would still be saving around £2,500 from the tax cut. While the precise details of the Cameron's tax affairs are unknown, Downing Street sources last night would not confirm that Mr Cameron was affected by the 50p tax rate.

Aides were said to be "deeply concerned" by how Mr Cameron's tax affairs will look to the general public.

The other big winner of the changes is Boris Johnson who is up for re-election in May. He receives a salary of a £140,000 as Mayor as well as £250,000 a year for his weekly column in the Telegraph which he once memorably described as "chicken feed".

Like other top rate tax-payers he could off-set some of the liability through pension and charitable contributions, but he is still likely to have made a substantial tax saving on the changes – possibly as much as £10,000 a year.

Another minister who could benefit is Jeremy Hunt, the Culture Secretary. Like other Cabinet ministers he receives a salary of £134,000 but on top of this he declares a half-share of a holiday house in Italy, from which he gets rental income and a half-share of an office building in Hammersmith which is also rented out.

He also retains 50 per cent of the shares in Hotcourses, an educational company he jointly founded. However dividends from these shares are taxed separately so would not be covered by the £150,000 tax threshold.

Last night ministers said that, while salaries were a matter for public record, along with relevant interests declared in the register, all other aspects of their finances were a "private matter".

However Francis Maude, Andrew Mitchell, David Willetts, Dominic Grieve, Owen Patterson and Lord Strathclyde all declare rental income in the Register of MP's interests. In order for them not to benefit from the 50p tax cut they would have to earn less than £1,250 a month in rental income.

Thanks, George: The rich get richer

David Cameron

As PM he earns £142,500 but he also rents out his former home for up to £70,000. The tax changes are likely to save him £3,000 - £5,000 a year.

Boris Johnson

Paid £140,000 as Mayor plus £250,000 a year for column in the Telegraph. The new tax rate could save him as much as £10,000 a year.

Jeremy Hunt

A millionaire outside politics, he owns a half-share of holiday house in Italy that is rented and a half-share of a London office, also rented. Almost certain to benefit.

George Osborne

Earns £134,565 and has recently started renting out his £2m Notting Hill home, so would have been hit by tax rate next year.

Philip Hammond

Reportedly worth £7.5m, but does not pay 50p tax rate at present as shares have not paid dividends in the last two years.

Lord Strathclyde

Family firm controls land worth £6m. Member of Lloyd's of London. Likely to benefit from the tax cut.

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