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    The first indications are coming through about the impact of the 50p tax rate in the self-assessment tax paid in January.

    It was expected by HMRC number crunchers, based purely on a mathematical calculation, that £1bn extra would be collected in January as a result of the 50p tax rate. What has actually happened in the real world is a reduction of £509m in this part of the HMRC income tax regime.

    Treasury 'sources' said that highly paid individuals are arranging their affairs to avoid paying the 50p rate. Well surprise surprise....

    Before anyone starts going on complaining about tax evasion and how terrible and nasty the well paid are for not coughing up everything the taxman asks for you should think a bit about what exactly they are doing. I can speak here from direct knowledge of what is happening though naturally I cannot reveal any identity.

    Some people are not working so hard, perhaps taking an extra day off work to spend with their family. After all if you can afford it why not? Why not place quality of life ahead of earning more when HMRC take 52% of all the extra you earn (that's 50% income tax plus 2% NI). Why on earth should you bother to work longer and harder when you get only 48% of what you generate and that assumes that there are no additional costs to working. No-one will begrudge them more time with their families surely.

    Other people are not going after extra contracts, some are not bothering to take risks to expand their business.

    Yes, that right - avoiding the 50p rate is not all about complex (or even simple) tax avoidance schemes or even moving abroad though some will do both.

    HMRC and the economy are therefore suffering twofold as a result of this 50p tax rate loonacy.

    First from reduced tax revenues and that is something that will get worse with a compounding effect the longer the tax rate stays in place.

    Secondly from reduced economic activity - this directly impacts on the potential for new employment growth.

    The simple message is this..... those least able to afford the 50p tax rate are the poor and those dependant on benefits, jobseekers in particular.

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