A HUGE overhaul of income taxes has been revealed by the Chancellor today as part of his mini-budget.
Kwasi Kwarteng announced one of his budget ‘rabbits’ would be scrapping the very top rate of income tax for workers.
It means that anyone earning more than £150,000 will be able to keep more of their earnings, as their tax will go down to 40 per cent for anything above £50,000.
That will affect 629,000 Brits, according to HMRC – but critics will say that it will help the richest the most.
To combat that, the Chancellor also confirmed that slashing the 20 per cent rate of income tax down to 19p will come in next April.
That will help millions of workers paying the lowest rates of income tax, who will be better off.
Higher inflation and freezing the tax brackets means more people will be dragged into paying more tax.
Elsewhere in today’s mini-budget, the Chancellor confirmed:
- National Insurance rises will be cancelled and reversed
- A planned corporation tax rise will be ditched
- Stamp duty will be cut for millions of people buying homes – with a huge increase in allowances for first time buyers and more
- New low tax investment zones will help level up the economy and deliver growth
- Benefit claimants will face tougher penalties for failing to look for work
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The Chancellor will tell MPs: “Growth is not as high as it needs to be, which has made it harder to pay for public services, requiring taxes to rise. We are determined to break that cycle.”
The massive tax bonfire – the biggest since Margaret Thatcher’s Budget in 1988 – is a huge gamble as Ms Truss goes for broke on her mission to get economic growth.