Kwasi Kwarteng has scrapped the top income tax rate and cut stamp duties in a £45bn package of tax cuts to boost growth.
The chancellor revealed in his mini-budget that the base rate of income tax will be cut from 20 percent to 19 percent next year, while new buyers will benefit most from the cut in stamp duties. He also confirmed new investment zones to boost corporate spending and announced that households will benefit from the reversal of the National Insurance hike from November.
He said in Parliament: “We are determined to break that cycle. We need a new approach for a new era focused on growth.
“Our medium-term goal is to achieve trend growth of 2.5 percent and our plan is to expand the supply side of the economy through fiscal incentives and reforms. That way we will have higher wages, more opportunities, and finance public services, now and in the future.”
Here are all the key points from Mr. Kwarteng’s speech:
- The chancellor has abolished the top income tax rate and will lower the base rate from 20 percent to 19 percent from April 2023. From next year, the UK will have a single higher rate of income tax of 40 per cent, with the additional 45 per cent removed.
- Mr. Kwarteng announced that the planned increase in corporate tax from 19 percent to 25 percent next year has been scrapped.
- He also confirmed that the 1.25 percentage point increase in National Insurance will be scrapped from November. The chancellor said this would save workers an average of £330 a year.