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Income tax receipts expected to rise this year

An extra £10 billion could be generated by the government in income tax this year, it has been reported.

According to Accountancy Age, HM Revenue and Customs is expecting higher than predicted receipts for 2010-11.

Overall, the tax could raise £161 billion for the Treasury, up from earlier estimates of £151 billion.

The new 50 per cent top rate of income tax on high earners is expected to drive much of the increase.

It came into force in April this year and applies to anyone earning more than £150,000 a year.

Another change to occur last month was the scrapping of tax-free personal allowances for on annual salaries of £100,000 or more.

For lower wage earners, the current allowance is £6,475, although this could be raised to £10,000 under proposals being discussed by the new government.

The Liberal Democrats wanted to increase personal income tax allowances to this level and reports suggest their plans will be upheld under their coalition deal with the Conservatives.
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