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Tax from the rich to boost government income, says HMRC

Government likely to see a big rebound in income tax revenue this year, says HM Revenue & Customs.

The department responsible for tax collection has said it expects to raise an extra £10bn in income tax in 2010-11, nearly all from 40 per cent and 50 per cent rate taxpayers. According to HMRC predictions, this will significantly reverse the drop over the past two years which was caused by the recession.

The HMRC is also predicting that the number of income tax payers will rise this financial year to 30.6 million, an increase of 400,000. The higher rate tax bands will receive the biggest boost, with an extra 192,000 members bringing their total to 3.412 million. The 40 per cent tax rate applies to taxable incomes above £37,400 whilst the 50 per cent rate is levied on taxable incomes above £150,000 a year.

Last year higher-rate payers paid over £84bn in income tax, a total which is set to rise to over £92bn this year. The HMRC has predicted that this contribution will help the government's income tax to rise by £10bn this year to £161bn, which is approching 2007-8 levels.