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‘Make cutting income tax for middle-income earners top Budget priority’ Osborne says

7 Mar

In his summer Budget last year, the Chancellor increased the single person’s income tax allowance from £10,800 to £11,000 from this April. He also raised the higher-rate threshold from £42,385 to £43,000 from April. 

To keep on schedule with his target, he is expected to raise the threshold for the 40% tax band by at least another £1,400. 

Pressure to find the cash for the income tax cuts has intensified after the Chancellor abandoned plans for a tax raid on middle-class pensions. 

On Friday, Treasury sources confirmed a possible overhaul of the pension tax relief system had been postponed indefinitely. It was thought the shake up could have saved the Treasury at least £6billion a year. Some Tory insiders now expect a rise in petrol and diesel duty to fill the gap in Treasury plans.

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