500,000 more earners now pay income tax

Half a million more people are paying income tax this year than last year, estimates from Revenue & Customs reveal.

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The Times reports today that 30.5 million people will now be liable for taxes on their earnings, up from 30 million in 2004-5.

The increase takes the total number of extra people paying income tax since Labour came into office to 4.7 million, as a result of tax allowances rising with inflation rather than earnings.

The Institute for Fiscal Studies also released research yesterday saying that a Labour or Liberal Democrat government would have to raise taxes by £11bn, equivalent to adding 3p to basic rate tax, to fill black holes in the government’s tax and spending plans.

The Conservatives might be able to avoid raising taxes, the research suggested, but only if they could realise planned cost savings.

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