POLITICS

Budget 2014: George Osborne Raising 40p Tax Threshold Would Help Rich Most (PICTURE)

19/03/2014 14:33 GMT | Updated 19/03/2014 14:59 GMT

George Osborne has agreed to raise the 40p income tax threshold following complaints that the Tories needed to help the "middling professionals" affected by it.

Osborne told MPs that the higher rate tax threshold, which kicks in at earnings above £41,450, would rise to £41,865 next month and then by further a 1% to £42,285 next year.

Former Tory chancellor Lord Lawson said the 40p tax was "intended for the rich, the well-off" but now hit those who are "neither rich nor poor", while another ex-Tory chancellor Lord Lamont said that raising the threshold to £44,000 would be the "first step" to helping the "squeezed" middle classes.

Awkwardly, research so far suggests that the move would help the richest rather than the "squeezed" middle classes.

rich

According to the liberal thinktank, the CentreForum, which modelled for the effects of increasing the threshold to £44,000, the richest fifth of Britons would get the largest benefit, while the actual "middling professionals" would get an almost negligible benefit.