A threshold of £10,000 is due to begin in April, but Clegg will argue income tax should not kick in until £12,500 has been earned, according to reports.

Clegg had already been pushing for an increase to £10,500 in 2015.

But he is expected to say in a speech to business leaders today that the Liberal Democrats want to keep going.

“[This party] want to keep cutting income tax for ordinary taxpayer”, he will say.

“That will be the main item Danny and I push for in the Budget – again. In the next parliament we would raise the personal allowance so that no one pays any income tax on the first £12,500 they earn.

“It’s our flagship policy because it’s how we make work pay, and it’s our way of making sure the British people know that this recovery is theirs.”

The personal allowance has been raised in steps from £6,475 and will reach £10,000 in April next year.