Philip Hammond is preparing to use his Budget to bring forward income tax cuts for millions to a month after Britain leaves the EU in a Brexit boost, The Telegraph has learned.

The move, which would benefit more than 30million taxpayers, will see income tax thresholds rise from April 2019 - a year earlier than planned.

The Chancellor is considering the surprise plan for his Budget after the biggest improvement in forecasts for the UK's public finances in decades.

The Office for Budget Responsibility is set to give the Chancellor much more room for manoeuvre with new forecasts showing that borrowing is £13billion lower than forecast.

In their manifesto the Tories pledged to increase the personal allowance, the rate at which people start paying income tax, to £12,500 by 2020-21. The threshold for the higher rate of income tax will rise to £50,000.

Bringing the plans forward by a year will leave people hundreds of pounds better off from April of next year. It is expected to cost the Treasury up to £5billion.