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Boris Johnson vows to raise 40p income tax threshold to £80,000 in £10billion pledge

Boris Johnson vows to raise 40p income tax threshold to £80,000 in £10billion pledge

Boris Johnson vows to raise 40p income tax threshold to £80,000 in £10billion pledge if he becomes Prime Minister The Conservative leadership front-runner made the expensive pledge today There are 2.5 million  more higher-rate taxpayers today than there were in 1990 The threshold was frozen for years but to increase it to £80k would cost

Boris Johnson vows to raise 40p income tax threshold to £80,000 in £10billion pledge if he becomes Prime Minister

  • The Conservative leadership front-runner made the expensive pledge today
  • There are 2.5 million  more higher-rate taxpayers today than there were in 1990
  • The threshold was frozen for years but to increase it to £80k would cost £10bn 

Boris Johnson is drawing up plans to raise the 40p income tax threshold to £80,000 at a cost of almost £10 billion.

The higher rate of income tax currently applies on earnings over £50,000 in England and the move could benefit more than three million people.

The former foreign secretary believes the cost of the policy could be met through some of the cash set aside for no-deal Brexit planning.

In his regular Daily Telegraph column, published this morning, he said: ‘We should be cutting corporation tax and other business taxes.

‘We should be raising thresholds of income tax – so that we help the huge numbers that have been captured in the higher rate by fiscal drag.

Boris Johnson used his weekly newspaper column to call for a massive hike in the threshold at which people should pay tax at 40p in the pound

Boris Johnson used his weekly newspaper column to call for a massive hike in the threshold at which people should pay tax at 40p in the pound

‘We can go for much greater economic growth – and still be the cleanest, greenest society on earth.’

Under the plans someone earning £60,000 is estimated to see their tax bill fall by £1,000, the newspaper reported.

The move will cost an estimated £9.6 billion a year and will be funded from the £26.6 billion of ‘fiscal headroom’ currently set aside by the Treasury for no-deal preparations.

The number of people paying the 40p rate of income tax has risen steadily from 1.7 million in 1990 to 4.2 million in the current tax year.

Hundreds of thousands of additional people started paying higher rate tax after former chancellor George Osborne repeatedly froze the threshold at which the 40p rate was paid.

The threshold was raised from £41,900 to £50,000 in 2014 in response to the concerns of Tory MPs.

Contenders in the Conservative leadership race (top row, left to right): Boris Johnson, Dominic Raab, Jeremy Hunt, Rory Stewart, Mark Harper, Sajid Javid, (bottom row, left to right) Esther McVey, Matt Hancock, Andrea Leadsom, Michael Gove, Sam Gyimah. All are trying to replace Prime Minister Theresa May, pictured bottom right.

Contenders in the Conservative leadership race (top row, left to right): Boris Johnson, Dominic Raab, Jeremy Hunt, Rory Stewart, Mark Harper, Sajid Javid, (bottom row, left to right) Esther McVey, Matt Hancock, Andrea Leadsom, Michael Gove, Sam Gyimah. All are trying to replace Prime Minister Theresa May, pictured bottom right.

These plans however would go much further than simply to bring the 2019 threshold into line with the 1990 one, allowing for inflation.  It comes after several opther leadership contenders made bold tax pledges including:

  • Jeremy Hunt, who wants to slash corporation tax from 19 per cent to 12.5 per cent
  • Dominic Raab who promised to cut the basic rate of income tax from 20p to 15p
  • and Sajid Javid who suggested the £150,000 threshold at which people pay the 45p rate of income tax could be raised under his leadership.

The Tory leadership race currently includes 11 candidates: Esther McVey, Mark Harper, Sam Gyimah and Andrew Leadsom, Michael Gove, Rory Stewart, Dominic Raab, Johnson, Sajid Javid, Matt Hancock and Jeremy Hunt.         

There are 11 Tory MPs currently vying for the party leadership and the keys to Number 10

There are 11 Tory MPs currently vying for the party leadership and the keys to Number 10

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