London Chartered Accountants Blick Rothenberg LLP says that while the personal allowance has increased significantly over the life of the Coalition Government, it's been overlooked that more middle-income families have been caught by higher rate tax.

When the Coalition Government came to power in 2010, it pledged to increase the personal allowance to £10,000 to help hard working families. In the last Budget, the Chancellor announced this would be increased to £10,600 for 2015/16, exceeding the Coalition Government's pledge.

Nimesh Shah, partner at Blick Rothenberg, said: "While the point at which a person starts to pay income tax is higher now, corresponding reductions in the basic rate tax band have brought more people into higher rate tax."

In 2009/10 (the last tax year of the Labour Government), the basic rate tax band was £37,400, albeit the personal allowance was only £6,475. A person would need to earn over £43,875 before they paid income tax at 40%, that is a personal allowance of £6,475 plus the basic rate tax band of £37,400.

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With the start of the new tax year, a person starts to pay income tax at 40% on earnings over £42,385 – this is almost £1,500 less than 5 years ago. The illustration below shows how the reduction of the basic rate tax band has dragged more people into the 40% tax bracket.

In addition to the reduction in the basic rate tax band, the Coalition Government also introduced the "High Income Child Benefit" charge, which affects individuals who have income over £50,000. For every £100 of extra income over £50,000, they repay 1% of the Child Benefit payments, until they reach £60,000 when the Child Benefit payments are completely clawed back.

Blick Rothenberg has done a comparison of the changes with an example of a typical family of two children where only one parent works, earning £62,000, comparing their position in 2009/10 to now. In this situation, the family is over £1,700 worse off.

Mr Shah said: Nimesh said: "The main political parties have pledged further increases in the personal allowance but re-dressing the imbalance for middle-income families has to be made a priority."