In his fiscal statement, Chancellor Kwasi Kwarteng today announced a series of tax cuts and economic measures that he says will boost growth. The main points in summary:
- The basic rate of income tax has been cut by 1p to 19p effective from April 2023. This should benefit around 30 million taxpayers in England, Wales and Northern Ireland
- The 45% top rate of tax for higher earners has been abolished. This doesn't apply in Scotland
- The threshold at which stamp duty is paid in England and Northern Ireland has been raised from £125,000 to £250,000. For first time buyers it's £425,000, up from £300,000
- The cap on bankers' bonuses has been lifted
- The anticipated increase in National Insurance has been cancelled
- Low-tax investment zones will be set up across the UK
- Corporation tax will stay at 19%. The plan to raise it to 25% has been scrapped
In his response to the budget, CBI’s Director-General Tony Danker said, ‘Thousands of firms will be relieved to receive support to finish the job and get through the coming months. The Budget also has a clear eye to the future; to ensure finances are sustainable, while building confidence and investment in a lasting recovery.’
Our thoughts
We very much welcome the various measures that will bring benefit to individuals and businesses across our communities. However, the positive effects of cutting income tax and scrapping the NI increase will, to a large extent, be negated as we continue to face higher bills and a higher cost of borrowing.
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