Right at the start of her new administration, Liz Truss’ Government has laid down a marker with a tax cutting Mini Budget.
A question of semantics?
What was this exactly? First billed as an Emergency Budget, then it became a Fiscal Event and finally the more friendly Mini Budget.
Whatever you want to call it, Chancellor Kwasi Kwarteng announced tax cuts and economic measures representing a huge change of direction for the new Government.
- With effect from 6 April 2023, the basic rate of income tax has been cut to 19% and the 45% top rate of tax for higher earners abolished, leaving 40% as the higher rate of tax.
- The Stamp Duty threshold has been raised to £250,000 and for first time buyers it’s £425,000
- The cap on bankers’ bonuses has been lifted
- The planned rise in corporation tax from 19% up to 25% over the next few years has been scrapped
- The 1.25% increase in National Insurance which came in a few months ago has been reversed from November 2022 – but seemingly leaving the 1.25% increase in Dividend tax in place until April 2023
What are the commentators saying?
Meanwhile, on Twitter…
Chancellor’s statement staggering – Martin Lewis
On Twitter, Martin Lewis of Money Saving Expert wrote “That really was quite a staggering statement from a Conservative party government. Huge new borrowing at the same time as cutting taxes. It’s all aimed at growing the economy. I really hope it works. I really worry what happens if it doesn’t.”Martin Lewis on Twitter @MartinSLewis
Reckless and irresponsible – Rachel Reeves
Rachel Reeves, Labour’s Shadow Chancellor said the changes amounted to “A return to the trickle down of the past, not a brave new future. This is casino economics – gambling the mortgages and finances of every family in the country. It is reckless, and it is irresponsible.”Rachel Reeves – Shadow Chancellor on Twitter @RachelReevesMPRa
Further coverage will follow as we provide our reviews and reflections on what the Mini Budget means for you, your business and your family.