KWASI Kwarteng has swung an axe at income tax saving money for millions of Brits amid the cost of living crisis.
Speaking in the Commons this morning, the Chancellor revealed that the basic rate of income tax will be slashed to 19p from April next year.
And from April 2023, there will be a single higher rate of income tax of 40 per cent.
The Chancellor said: “The tax system is not simply about raising revenue for public services, vitally important though that is.
“Tax determines the incentives across our whole economy. And we believe that high taxes reduce incentives to work, they deter investment and they hinder enterprise.”
The major income tax announcement is one of just 30 being revealed in today’s hotly anticipated mini budget bonanza.
To help keep more money in hard working people’s pockets, April’s 1.25 percentage point rise in National Insurance will be binned from November 6 this year.
The cut will save 28 million people an average of £135 this year — and £330 next year.
And to help vulnerable Brits with sky rocketing energy bills, a price cap has been brought in freezing costs at £2,500.
The cap comes in on October 1 and will run for two years.
The first six months will cost the government around £60 billion.
Business energy costs will also be capped but only for six months, for now.
The Chancellor said: “The Prime Minister has acted with great speed to announce one of the most significant interventions the British state has ever made.
“People need to know that help is coming. And help is indeed coming.”
To kickstart a housebuilding and homebuying revolution, the government will reform planning laws.
Laws will be brought in to speed up the building of railways, shopping centres and houses.
A planned rise in Corporation Tax from 19 to 25 per cent has also been scrapped in today’s mini budget.
The government thinks the move will entice finance firms to London over rivals New York, Paris and Frankfurt.
“That is how we will turn the vicious cycle of stagnation into a virtuous cycle of growth,” the Chancellor said.
City fat cats are also in for a major pay day, with the cap on bankers bonuses thrown in the bin.
The cap was introduced by the EU in the aftermath of the 2007-2008 financial crash.
It’s joining a smorgasbord of other EU red tape policies being lit up in a post-Brexit bonfire.