More than a million extra middle-income workers will have been dragged into the 40p tax bracket by next year because of George Osborne's plans to boost income for the low-paid.
Raising the tax-free personal allowance has been a signature policy of the government, which claims it has taken almost two million people out of the tax system altogether.
However, a further rise from £10,000 to £10,500, due to be announced next week risks a backlash from Tory MPs, the Times reports.
They say balancing the cut by sucking in more workers to the higher tax bracket penalises middle-class families.
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