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Budget 2013 - 400,000 more to be taxed at 40%

George Osborne has fuelled outrage with one in six taxpayers now paying tax at the 40 per cent higher rate.

The government has been accused of disguising the worrying trend by making increases to the standard personal allowance, as was announced again in today's budget. The level of personal allowance will increase to £10,000.

Figures from HMRC reveal that in the 2010/11 tax year, when George Osborne became chancellor, three million people paid tax at the 40 per cent rate. The figure rose to 3.9 million in the 2012/13 tax year and will break the four million barrier in April when the starting point for paying 40 per cent tax is reduced.

Matthew Sinclair, chief executive of the TaxPayers' Alliance argued that at successive budgets and autumn statements, George Osborne has 'failed to cut the overall tax burden and instead chosen to take with one hand while he gives with another.'

Unless Osborne reverses decisions he set out in the autumn statement, it is estimated that an extra 400,000 people will become higher rate taxpayers in the 2013/14 tax year, bringing the total to a record of 4.3 million people.

The Institute for Fiscal Studies think tank estimated the figure could go as high as five million over the next three years, as the starting point for paying 40 per cent tax is to be cut from £42,475 to £41,451 from 6 April, and is then planned to rise by just one per cent a year thereafter.

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