The amount earned before basic rate taxpayers move into higher rates has been left unchanged by the Chancellor, but the personal allowance is to be raised.

As announced in the Autumn Statement 2012, the basic rate limit will drop to £31,865 by 2014/15 - from £32,010 in 2013/14 - with the higher rate threshold falling by 1% to £41,865 during the same financial year.

In his Budget 2013 speech however, George Osborne did earmark a rise of the personal allowance to £10,000 by 2014/15.

Nigel May, tax partner, MHA MacIntyre Hudson said: 'The increase in personal allowances will give no benefit to high earners. The Chancellor has retained the personal allowance claw back where income exceeds £100,000. This will mean an effective tax rate of 62% on incomes between £100,000 and £120,000 for 2014/15.'

Brian Garner, tax director at Michelmores, said: 'We already have the most people liable to pay higher tax than ever before and that is set to increase still further.'Also announced last year - and left unchanged - the additional rate of income tax will be reduced from 50% to 45% from 2013/14.

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