Budget 2012 Reaction: More people dragged into Higher Rate Tax

Research has shown that even people of “relatively modest salaries” will be dragged into higher rate tax as a result of this week’s Budget. The Institute for Fiscal Studies (IFS) has predicted that as many as five million people could be paying higher rate tax, at 40%, by 2014; by contrast last year 3.7 million people paid tax at the upper rates. In the Budget George Osborne also announced the end of age related allowances for those people over 65. The IFS said the “granny tax”, as it has quickly been dubbed, would cost pensioners approximately 0.25% of the annual income in ...