Budget 2012: Osborne poised to cut top tax rate to 40p

The Chancellor, George Osborne, is set to make a cut to the top rate of income tax his headline measure in next week's Budget, as the Liberal Democrats have eased their opposition to the move in exchange for other concessions.

Osborne is set to cut the tax rate from 50p to 40p despite concerns the move will paint the Conservatives as protectors of the rich. In return for supporting the measure, the Lib Dems are pressing for a large increase in the personal allowance for those in work and a commitment to a 'mansion tax'. A preliminary study conducted by Customs & Excise for the Treasury, due to be published next week, is expected to show the 50p rate is bringing in hundreds of millions, rather than billions, of pounds. An earlier Treasury study assumed it would raise £2.6bn. Before 2010, the top rate had ...