Britain's biggest earners face higher taxes as Prime Minister Gordon Brown and Chancellor Alistair Darling attempt to reduce a borrowing bill tipped to reach close to £120bn next year.

The chancellor is expected to announce a new top rate of tax of 45% which will apply to those earning more than £150,000, The Times reports.

The new rate – which probably will come into effect immediately after the next general election – is expected to be among the deferred tax rises announced today to show the Treasury intends to rebalance the books.

The higher rate is said to affect almost 300,000 income earners and raise about £1.2bn. Borrowing is forecast to rise to record levels next year after Darling today in his pre-budget report cuts 15%, lowers income tax by £120 for those on the basic rate and postpones planned rises in vehicle duty and corporation.

Further reading:

Brown promises tax cuts, help to small business

Grant Thornton predicts PBR measures

Read The Times story