Darling announces new top level income tax

LONDON (Reuters) - Chancellor Alistair Darling said on Monday a new 45 percent tax rate levied on individual earnings of over 150,000 pounds a year would be introduced in April 2011, after the next election.

The top rate of income tax is currently 40 percent.

Darling also made permanent a rise in income tax allowances introduced in May for this financial year to make up for the abolition of a 10 percent rate, helping those on low incomes.

A pledge not to raise taxes on high earners had been a cornerstone of Labour's policy stance since the 1990s when it shed many of its traditional left-wing positions in a bid to revive its fortunes.

Darling also said he would increase by half a percent all rates of National Insurance Contributions, for both employees and employers from April 2011.

To ensure this increase did not fall on those on modest incomes, he announced a rise in the starting point for national insurance to align it with that of income tax.

For full coverage of Darling's pre-budget statement, click on: here