Businesses in fury at top-rate tax move

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"The problem with layering on a new top rate of tax is that not only does it not raise much money in comparison to, say, a 1p rise in the basic rate, it also hits more people than you think," said personal tax expert Clive Mackintosh of PricewaterhouseCoopers.

"A new rate hits not only the people who fall into the band but potentially many more people who aspire to be earning that sort of money, who might now think 'do I want to pay that much tax?'."

Mackintosh said the new rate will proportionately hit private business people harder as some could now be paying well over the psychologically stark 50% of their earnings in tax when factoring in the rate of corporation tax they will also be paying.

The top rate of paying income tax at 45p in the pound on earnings of more than £150,000 compares unfavourably with the Germans, who start paying that rate at €250,000 (£210,000) and the Americans, who might typically pay 45% from $357,700 (£240,000).

"This bucks the global trend of falling top rates of personal tax," said David Kilshaw of KPMG.

"The UK has to remain competitive at a time when the workforce is becoming more mobile.

"This is a further potential challenge to London's position as a leading global financial centre," he added.