Boris Johnson’s pledge to raise the threshold for the top rate of income tax from £50,000 to £80,000 would cost £8bn a year and boost the incomes of the highest-earning 8% of the adult population, according to the Institute for Fiscal Studies. The thinktank said it was dismayed that the government appeared to be moving ahead with plans that would widen inequality and cost billions of pounds in extra borrowing.
The policy would take 2.5 million people out of paying higher-rate tax, more than reversing the increase over the past three decades, the tax and spending watchdog said. About three-quarters of the tax benefit would go to the highest-income 10% of households.
Depending on the timing of a general election, the IFS added that it would leave only 1.3 million, or fewer than 3% of adults, to pay a higher rate of tax.