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Osborne eyes £50k higher rate tax threshold

Chancellor George Osborne claims the Liberal Democrats blocked plans to raise the 40 per cent income tax threshold to £50,000, indicating the Conservatives would take more high earners out of tax if elected.

Osborne had hoped to announce the plans as part of the final Budget of this Parliament earlier in the week but he says the plan was vetoed by their Coalition partners.

The Chancellor told the BBC: “Of course, as a Conservative government, we’d like to go further on the personal allowance, take that up to £12,500.

“We’d like to raise the higher-rate threshold to £50,000, the point at which people pay the 40p income tax, so you don’t have people on middle incomes sucked into that higher rate.

“That’s the kind of thing that, actually, the Liberal Democrats didn’t support and I guess it’s the kind of thing I might have done differently in this Budget.”

People currently starting paying the 40p tax rate when they earn more than £41,865 a year. Osborne announced plans to raise this to £42,385 in April, followed by £42,700 in 2016 and £43,300 in 2017.

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There is one comment at the moment, we would love to hear your opinion too.

  1. I’d think pretty hard about that threshold. The problem with withdrawal of benefits is the effective marginal tax rate that arises.

    An individual (who’s the higher earner in a household) with four children under 16 will face an effective marginal rate of 72% on anything between £50k and £60k. That’s a hell of a jump from 33%!

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