New Chancellor Kwasi Kwarteng found himself firmly in the spotlight as he delivered a mini-Budget that saw the pound crashing to a new 37-year low.
The winners and losers were left to reflect on the announcements as the Chancellor delivered a package of tax cuts worth £45 billion in an attempt to boost the UK’s economic growth.
A lot of the changes had already been forecast in the days running up to Friday’s Westminster statement, but scrapping the 45 per cent additional rate of income tax was unexpected.
Mr Kwarteng told MPs: “The additional rate of income tax at 45 per cent is currently higher than the headline top rate at G7 countries like the US and Italy, and it is even higher than social democracies like Norway.
“But I am not going to cut the additional rate of tax today, Mr Speaker, I am going to abolish it altogether. From April 2023, we will have a single higher rate of income tax of 40 per cent.”
The Chancellor also stopped the planned increase from 19 per cent to 25 per cent on corporation tax; scrapped the 1.25 per cent increase to National Insurance that was due to come in in November; and said there would be a permanent cut to stamp duty.
There will be no duty to pay up to £250,000, while for first-time buyers this goes up from £300,000 to £425,000.
He continued his list of announcements by lifting the cap on bankers’ bonuses and bringing forward the planned 1p reduction to the basic rate of income tax. This was due to happen in 2024, but will now go ahead next year, although not in Scotland.
The Government has indicated that 31 million people will enjoy an average £170 a year reduction in their tax with this move.
Given the ongoing cost-of-living crisis, do you think the mini-Budget has provided any answers for cash-strapped families? What would you like to have seen included?
- Green opportunities boosted by Government investment - December 6, 2022
- Tax Diary December 2022/January 2023 - December 2, 2022
- National Living Wage changes from 1 April 2023 - December 2, 2022
- Uprating benefits and cost of living payments - December 2, 2022
- Capital Gains planning - December 2, 2022
- Fiscal drag - December 2, 2022
- HMRC app is a gift for Christmas workers and employers - December 1, 2022
- The increasing pull of fiscal drag - November 29, 2022