Wider tax net snares low-paid

A Treasury minister last night said 400,000 more people would pay tax as a result of the decision to freeze personal allowances in the last two Budgets.

Ministers are worried at the impact the tax increases will have when they take effect in April. Figures given in a Commons written answer by Stephen Dorrell, Financial Secretary to the Treasury, will heighten those fears. It means nearly half a million on low pay, previously exempt from tax, will be drawn into the tax net.