Millions more workers on 'modest' salaries hit with 40% tax

Up to five million workers will pay the higher rate of income tax following changes in the Budget, analysis from the Institute of Fiscal Studies has found.

The think tank said some 15% of all UK taxpayers could come under the 40p band by next year - including many people earning "modest" salaries, reports said this morning. The IFS said the number of people paying 40% tax could increase from 3.7 million last year to 5 million by 2014. It added the figure is three times that of the total in the 1980s. The increase in higher rate taxpayers comes after George Osborne announced moves to raise the lower threshold for income tax. The Daily Telegraph said to ensure higher paid workers do not fully gain from that cut the point at which 40% ta...