Hundreds of thousands of basic rate taxpayers will fall into the 40% income tax bracket when the government lowers the threshold next year.
The Budget small print shows the higher rate threshold will be reduced by £1,025, from £42,475 to £41,450, from April next year, capturing, experts suggest, as many as 300,000 extra people.
The Good News
- the top rate of tax will be cut to 45% from April 2013
- the personal allowance will increase to £9,205
The Bad News
- basic rate threshold will reduce to £32,245
