The basic rate of income tax will be reduced by two pence to 20p — its lowest level in 75 years — from next year. But accountants have given warning that although higher earners will benefit, lower earners will be out of pocket because the current starting rate of tax of 10 per cent will be scrapped.

The starting rate, which Mr Brown introduced in 1999, will be withdrawn from next year. Taxpayers currently pay this rate on the first £2,150 earned above the personal tax allowance of £5,035. Scrapping it will cost all taxpayers about £220 a year, and will net the Treasury more than £7 billion next year and £8.6 billion in 2009/10.

Higher rate taxpayers will net £700 from the cut in basic rate tax from 22 per cent to 20 per cent to offset this loss, but those on lower incomes will not have the same benefit.

Maurice Fitzpatrick, of Grant Thornton, the accountant, said: “This is a classic case of robbing Peter to pay Paul. The losers are people earning less than about £19,000 a year.”

Some workers on low incomes may benefit from increased working tax credit and child tax credit payments, but these benefits depend on personal circumstances and are fiendishly difficult to calculate.

John Whiting, of PriceWaterhouseCoopers, said: “A single man working modest hours may not get enough from working tax credits to make up the shortfall, while a couple working full time may get more than enough.”

A married couple with a child where the working spouse earns £9,000 will lose out by £192, even after tax credits are taken into consideration. But a worker earning £45,000 will be £354 better off.

Taxpayers will see their liabilities shift once again from April 2009, when Mr Brown aligns income tax and national insurance thresholds.

NI is currently levied at 11 per cent on annual earnings of between £4,368 and £33,540 a year, and at 1 per cent on earnings over £33,540. But from 2009, workers will pay 11 per cent on all earnings up to the higher rate threshold which accountants estimate will rise to £36,000 by 2009.

While lower earners are not likely to be affected by this move, higher earners will have to pay more national insurance. A worker earning £45,000 a year will be £35 worse off in 2009 than in 2008.

Ronnie McCombe, from KPMG, the accountant, said: “With the alignment of income tax and NI bands, Mr Brown has effectively blurred the boundaries between the two. With income tax at 20 per cent and NI at 11 per cent, isn’t the effective rate of tax in the UK now 31 per cent?”

Pensions will also be affected. Contributions currently attract tax relief at the basic rate. A pension contribution of £100 currently attracts tax relief worth a further £28.21. But when income tax is reduced to 20 per cent, the total pension contribution will be just £125. Paul Illot, of Bates Investment Services, the independent financial adviser, said: “Investors will need to consider increasing the level of their own contributions by around 2.5 per cent.”

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