Chancellor cuts 50p top tax rate

By Mark Fordham

As expected, chancellor George Osborne has announced cuts to the top rate of income tax in the Budget, as well as increasing the amount people can earn before they start paying tax.

Mr Osborne said the 50p rate was uncompetitive and raised "next to nothing". As a result it will fall to 45p next year.

Meanwhile the personal tax allowance will increase to £9,205, which will benefit millions of working people.

Cuts to child benefits will be phased in for people earning more than £50,000 rather than £43,000, which is what was previously planned.

Mr Osborne defended the potentially risky decision to cut the top rate of tax by stating five times as much would be raised from the wealthiest in the form of other tax and anti-avoidance measures being brought in.

"No chancellor can justify a tax rate that damages our economy and raises next to nothing," he said in the House of Commons.