'1.3m more' in 40p income tax band

Changes made in George Osborne's Budget will mean 1.3 million people on "relatively modest salaries" are forced into the higher 40p rate of income tax over the next few years, a respected economic think-tank said.

The Institute for Fiscal Studies (IFS) said that the number of higher-rate taxpayers could hit five million for the first time in 2014 because of the Chancellor's decision to reduce the threshold for the 40% rate to £41,450 from April 2013.