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Cameron backs away from 45p tax rate cut

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Prime Minister David Cameron has distanced himself from calls to ditch the 45p income tax rate for higher earners, saying it is “not our priority”, The Times reports.

Speaking at an event held by the newspaper yesterday, Cameron said his primary aim was to increase the thresholds beyond which people pay basic and higher rate tax.

Asked about scrapping the 45p rate, Cameron said: “That is not our priority. That is not our plan. We set out the tax cuts we want to achieve in this Parliament, frankly they are pretty challenging in order to reform all those.

“We want to get the personal allowance to £12,500, and we made a good step towards that in the Budget. We don’t want people paying 40p until they get to £50,000 — we’ve got quite a long way until we get to that.”

He added: “That’s where we are going to spend our tax-cutting money rather than anything else.”

Chancellor George Osborne unveiled plans to raise the personal allowance to £11,000 in 2016/17, with an aim of increasing the threshold to £12,500 by the end of this Parliament.

The point at which people pay the 40p income tax rate will also rise to £43,000 next year, with the Government ultimately targeting a threshold of £50,000.

Osborne had faced mounting pressure from influential figures within his own party, including former chancellor Lord Lawson, to slash the top rate of tax from 45p to 40p.

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