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LONDON - BRITISH Finance Minister Alistair Darling will announce an increase in the top rate of income tax on Monday when he unveils his economic stimulus plan to combat looming recession, media reports said.
Prime Minister Gordon Brown's government is planning to raise the tax on incomes over 150,000 pounds (S$336,000) a year from 40 pence to 45 pence in the pound, the BBC and the Sun newspaper reported.
The rise would not be introduced until 2011, after the next general election, allowing the ruling Labour party to avoid breaking its 2005 election manifesto not to raise the top or bottom rate of income tax.
Mr Darling is expected to slash taxes and boost spending in his pre-budget report - an outline of his taxation and spending plans ahead of the full 2009/2010 annual budget due early next year - presented to parliament on Monday.
Reports suggest the income tax change is aimed at offsetting the new spending that Mr Brown believes necessary to boost the economy, in an attempt to get Britain's finances back on course in the long-term.
It is also expected that Mr Darling will announce a cut in value added tax from 17.5 per cent to 15 per cent.
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