Sweeping reforms to the tax system in April, involving £14bn of tax cuts and tax credit increases, are set to benefit households at the top and bottom of the income distribution, according to the Institute for Fiscal Studies, the independent think- tank.

In the biggest set of changes implemented in any year under Labour, reforms to income tax and national insurance will lead to a slight increase in disposable income for wealthier householders. The changes to tax credits will boost disposable incomes for the poorest 30 per cent of households, while those in the middle will see little change.