The threshold for paying the top 40% rate of income tax will rise by 1% from 2014, the government announced today.
In the Autumn Statement, Chancellor George Osborne announced the threshold for paying the top-tier level of income tax will go from £41,450 currently to £41,865 in 2014, followed by a further 1% rise in 2015 to £42,285.
The news came as the Chancellor announced plans to 'uprate' benefit, essentially freezing rises in state support at less than the rate of inflation. He said this should be matched with less tax for those who do work.
'I want to be completely clear with people, this is in an increase. In fact it is the first cash increase in the higher rate threshold in this parliament,' he said.
'Again, there are no easy ways to reduce the deficit - but from year to year, no one will pay a penny more in income tax.'
Personal allowance will rise by £1,335 next year, ‘the highest cash increase ever’, Osborne claimed, so that next year workers will be allowed to earn £9,440 before paying any income tax at all.
‘This is a direct boost to people working hard to provide for their families,’ he said.