In his 2009 Budget report Chancellor Alistair Darling announced a sharp increase in income tax for high earners.
Employees that earn more than £150,000 a year will pay income tax of 50%. This will be enforced from April 2010.
The change contrasts to the hike in income tax to 45% for high earners that was announced by the Chancellor in his pre-Budget report in November 2008, which the government had planned to introduce in 2011.
In addition from 2010/11 the basic personal allowance for income tax will be reduced for those with an adjusted net income above £100,000. This means that the amount of the allowance will fall by £1 for every £2 above the income limit.
The Chancellor introduced the measures as part of efforts to reduce government borrowing to £261.2bn by 2013-14.
In the Budget report the chancellor said: “Over the medium-term the Government’s fiscal policy objective is to ensure sound public finances and that spending and taxation impact fairly within and between generations. Building on the significant fiscal consolidation announced in the 2008 Pre-Budget Report, this Budget sets out tax and spending measures that reduce borrowing by £261.2 bn by 2013-14.”