Kwarteng unveils biggest package of tax cuts in 50 years

Chancellor Kwasi Kwarteng has set out the biggest package of tax cuts in 50 years in a bid to boost economic growth. The basic rate of income tax will be cut from 20% to 19% from April 2023, while the 45% top rate of tax for people paid more than £150,000 will be abolished. It means the 40% higher rate, for earnings of over £50,270, will be the top rate. The reduction in income tax, along with the reversal of the National Insurance rise, means a person earning £20,000 a year will save £167, according to analysts, while an individual with an income of £40,000 will save £617. A person on £100,000 will get an extra £1,469. Unveiling the mini-budget, the Chancellor said high tax rates “damage Britain’s competitiveness” and reduce incentives for new businesses, arguing that tax cuts are “central to solving the riddle of growth”. Other measures announced on Friday included the cancelling of the UK-wide rise in corporation tax, which was due to increase from 19% to 25% in April 2023. Labour and some Conservative MPs have said it was wrong to cut taxes for the wealthy during a cost-of-living crisis, with shadow chancellor Rachel Reeves describing it as “casino economics”. But Mr Kwarteng said he was “being fair” by reducing taxes right across the income bracket. In an interview with the BBC’s Chris Mason, the Chancellor said: “I don’t think it’s a gamble at all. What was a gamble, in my view, was sticking to the course we are on.”

Financial Times

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