By Daniel Hunter

With just a few hours until George Osborne unveils the 2012 Budget there are already reliable reports that he is expected to announce an increase in the amount people can earn before they start paying tax.

Further to that the Chancellor is believed to be cutting the top rate tax from 50p to 45p, although this will not come into effect for another year.

Dropping the top tax rate will anger some people, however, the government insists it is not giving a net tax cut to the rich because money will be clawed back by reducing tax avoidance and raising property taxes.

The official Budget will be announced at 12:30 today (Wednesday), with Labour stating that the Chancellor should be aiming to help Britain’s ordinary families.

“The Liberal Democrats have pushed very hard to lift low earners out of tax and help hard pressed middle income families and that’s our priority, but the Budget has to be judged against the extent to which it contributes to Britain’s recovery from this dreadful economic crisis into which we’ve been plunged,” Business Secretary Vince Cable said.

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