The 50p top rate of income tax will be reduced to 45p from April next year, Chancellor George Osborne announced this afternoon.
Delivering his Budget address this afternoon, Osborne said the existing 50p rate was the highest in the G20 and widely acknowledged as "harming the British economy".
He said the government had raised just a third of the £1bn it was told it would raise via the tax.
"No Chancellor can justify a tax rate that damages the economy and raises next to nothing", he said.
He said the government would be getting "five times as much" in revenue from the richest in society as a result of other measures announced.
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