The coalition government is to abandon plans to scrap the 50p top rate of tax despite rising pressure from backbenchers.
Business leaders and economists had also put pressure on the coalition to abandon the 50p rate in recent months, arguing that doing so will stimulate the UK economy.
However, the coalition fear they will be accused of pandering to the wealthy if they scrap the rate, reports The Daily Telegraph.
Furthermore, a report being prepared for the Chancellor by Her Majesty's Revenue and Customs is expected to show a "surge" in revenues totaling hundreds of millions of pounds from the first year of the new rate - undermining the economic case for scrapping the levy.
This new policy changes follows plans announced yesterday by Cameron to crack down on executive pay.
However, every cloud has a silver lining as there is no mention that 50% tax relief on pension contributions is to be scrapped.
Should your taxable income exceed £150,000 gross per annum, do not hesitate to contact us to discuss how you can benefit from 50% tax relief on a pension contribution.