Kemi Badenoch’s thought to vary how you might be taxed unravelled – the way it may injury you

Kemi Badenoch’s suggestion that millionaires should pay the same rate of tax as the poor could cost low earners a £1,200 tax hike, analysis shows.

Labour said the Tory leader’s idea for a flat rate of income tax could mean a huge £34billion tax giveaway for top earners, paid for by increasing taxes of less well-off people.

The modelling, which used a 25% flat rate as an example, should working people could end up paying £1,200 more every year. But those earning more than £200,000 a year could see their tax bill slashed by over £5,000.

British people pay different levels of tax depending on their tax band. At the moment, you don’t have to pay income tax on any earnings up to £12,570. From £12,571 to £50,270 you pay a 20% rate and from £50,271 to £125,140 you pay a 40% rate. Anything over £125,140 will be taxed at a rate of 45%.

Labour’s research aligned all three rates at 25% – a 5p increase in the basic rate, a 15p cut in the higher rate, and a 20p cut in the additional rate. It found that those paying the basic rate could see a £1,282 tax rise, on average, while those paying the 40% rate could see a £4,516 cut on their tax bills. Those paying the 45% rate could see a £5,044 tax cut.

Ms Badenoch came under fire and faced comparisons to failed PM Liz Truss after saying a flat tax rate is a “very attractive” idea on Monday. She admitted the country couldn’t afford to introduce a flat rate of tax at the moment – and said the welfare bill would need to be slashed to do so.

The former Business Secretary made the comments during a speech at the London Palladium, which is showing a pantomime of Robin Hood – the heroic character known for helping the poor. The intervention triggered unfortunate comparisons to Ms Truss, who was forced from office after just 49 days following her disastrous mini-Budget. She tried to scrap the 45p tax rate for those paid over £150,000 but had to U-turn after the unfunded plans triggered economic chaos.

Ms Badenoch set out her bizarre plans at an event protesting inheritance tax changes for farmers. The theatre’s owner Andrew Lloyd Webber, who is worth £504million according to the Sunday Times 2023 Rich List and is said to farm nearly 5,000 acres of land, had lent the venue to farmers.

Asked if she would scrap tax bands and put in place a flat tax if the Tories were in power, Ms Badenoch said: “This is an idea that I’ve heard many times. It’s very attractive, but if we’re going to get to that sort of scenario, there’s a lot of work we need to do first-hand.

“At the moment, we are a welfare state with a little bit of a productivity attached to it. We’ve got to turn that around. We cannot afford flat taxes where we are now. We need to make sure we rewire our economy so that we can lighten the burden of tax and the regulation on individuals and on those businesses that are just starting out, in particular.”

Exchequer Secretary to the Treasury James Murray said: “While Labour is protecting working people’s payslips, the Tories want to hike their taxes by thousands of pounds. Kemi Badenoch ’s massive tax cuts for the rich would be paid for by working people.

“The Conservatives need to come clean about the tax rises they would put on working people or confirm whether this is the latest gaffe from its new leader.”