Labour expected to seek Budget amendments to increase tax on high earners

Labour is set to table Budget amendments calling for income tax rises for high earners.

It is understood Labour will put down amendments to the Budget resolutions on Thursday demanding a hike in income tax to 45% on earnings above £80,000, and 50% for those above £125,000.

The expected move follows a sharp row in Labour ranks after shadow chancellor John McDonnell said the party would not oppose Tory tax cuts for the middle class.

The Labour leadership has said the party will not attempt to force a vote on the personal allowance changes – effectively abstaining.

Under Chancellor Philip Hammond’s Budget plans the personal allowance, which is the maximum amount someone can earn before paying tax, will rise to £12,500 from £11,850.

The higher rate threshold, the income at which someone becomes liable to pay the 40% tax rate, will rise to £50,000 from £46,350 at the same time.

A number of prominent Labour MPs have called on the party to oppose the changes as they say they disproportionately benefit the better off.

The Resolution Foundation think tank said the tax cuts would “overwhelmingly benefit richer households”, with almost half, 45%, set to go to the top 10% of households.

But Mr McDonnell has defended his stance saying people like head teachers have had a “rough time” in recent years, and the move would bring more money into the economy.

A Labour spokesman said the party welcomed tax reductions for low and middle-income earners “however modest”.

Labour intends to vote against the Budget as a whole.