Lib Dems drop pledge to raise income tax by 1p

Income tax is the government’s single biggest source of money. Under the current system, the first £12,571 you earn per year is tax-free, but once you breach that threshold you pay at least 20p tax for every pound earned. For earnings between £50,271 and £125,140, you pay 40p in tax on every pound earned – and above £125,140, it is 45p.