Top income tax rate falls to 45%

A raft of government changes to tax reform come into effect from today, including a cut in the top rate of income tax from 50p to 45p.

Danny Alexander: Tax reforms will make work pay

Chief Secretary to the Treasury Danny Alexander has said that income tax changes that came into effect today will help make work pay.

Chief Secretary to the Treasury Danny Alexander. Credit: Gareth Fuller/PA Wire

Mr Alexander told Radio 4's Today programme that the coalition government "is working hard to help those on low and middle incomes".

He added: "We think it's important that we make work pay, that we reward people who are working hard on ordinary incomes and that is what the increase in the personal allowance will do".

TUC: Tax reforms 'huge slap in the face' for families

The Government's sweeping changes over tax rates is a "huge slap in the face" for families, the TUC general secretary said today. The new tax reforms include a cut in the top rate of income tax from 50p to 45p.

TUC general secretary Frances O'Grady said:

Cutting taxes for the richest in our society is a huge slap in the face for the millions of hard-working families struggling to make ends meet.

This move, which will lead to the loss of vital revenues, comes at a time when low-income households are seeing a huge range of vital benefits and tax credits mercilessly cut back.

It says a lot about this government's priorities that it is forever coming up with new ways to take money away from those at the bottom, whilst handing out tax breaks to those at the top.

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Clegg attacks Labour over tax rate claims

Deputy Prime Minister Nick Clegg has attacked Labour for trying to "pull the wool over people's eyes" over tax reforms that came into effect today.

Deputy Prime Minister Nick Clegg attacks Labour over sweeping tax change claims. Credit: Matt Dunham/PA Wire

Labour launched its own poster - with the tag "Who Wants to Bung a Millionaire? Dave Does" - setting out claims that high earners are benefiting while millions are worse off under coalition reforms.

But Mr Clegg insisted ministers had fixed a "gross unfairness" in the system left by the previous government that allowed the rich to pay less tax than the poor. In a "letter from the leader" he told Lib Dem supporters:

"Of course, the new 45p upper tax rate - down from 50p - is also coming into effect. But don't let Labour pull the wool over people's eyes. They may complain now, but of the 13 years they were in power, the 50p rate was in place for just 36 days."

Tax change spin war fought on Twitter

Prime Minister David Cameron took to Twitter to highlight the increase in the personal tax allowance. He wrote:

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From today 24million people will be paying £600 less income tax than in 2010 http://t.co/UyTSd1VyLV

Mr Cameron also included a link to a new Conservative poster outlining the change with the headline "Help for Hardworking People".

Labour launched its own poster - with the tag "Who Wants to Bung a Millionaire? Dave Does" - setting out claims that high earners are benefiting while millions are worse off under coalition reforms.

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Today, 13,000 millionaires got an average tax cut of £100,000. RT to share poster launched today http://t.co/vhVmj7bKa0

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Unite: 'Taxpayers will be furious with George Osborne'

Millionaires will be raising a glass of champagne to George Osborne this weekend as he slashes the incomes of people struggling to get by to give handouts to the rich.But ordinary people - taxpayers - will be furious that George Osborne has chosen to give away £1 billion to the super-rich while their fuel and food costs rise and wages are falling.

His party knows no shame. They are trying to claim that their tax cuts benefit ordinary people but this is another lie - the truth is that while those earning over £1 million per year will be an average £100,000 better off, low income families will be around £900 worse off.

This is not the way to recover our failing economy. Creating real jobs and paying decent wages, including a one pound increase on the minimum wage, will bring down the benefits bill and get people spending again.

Instead of getting on with the job he ought to be doing, like sorting out the problems he has caused to our economy, Osborne prefers to encourage hatred and demonise the poor, both in and out of work, in an ideological attack on our welfare state.

– Len McCluskey, Unite general secretary

Balls 'would not support 50p tax if it did not raise revenue'

Shadow Chancellor Ed Balls said he would not support a 50p top rate of tax if it was not raising revenue.

He told Radio 4's Today programme:

I would rather see every tax rate come down. I'm not a high tax person, I'd rather get taxes low.

I wouldn't support a 50p tax rate if it wasn't raising revenue but the reason why it's important to have it, the reason why it was introduced first in 2008 and then 2009 was at a time when families are paying a big price for the global financial crisis it is important that we share the burden fairly.

New tax reforms come into effect today

The Government's new tax reforms come into effect today, here's a run-down of the main changes:

  • The largest rise in personal allowance, which means that no one pays any tax until they earn more than £9,440 per year.
  • The higher rate personal allowance threshold is to fall to £41,450.
  • The top rate of income tax will fall from 50p to 45p.

Read: Balls renews attack on government's tax reforms

Read: Top rate tax reduction a 'giveaway to the very top'

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