LONDON (Parliament Politics Magazine) – The following are the key points from the mini-budget statement Chancellor Kwasi Kwarteng gave to his MPs:
- Beginning in April 2023, the basic income tax rate will be reduced to 19p in pound. Will result in an average annual relief of £170 for 31 million people.
- The higher income tax rate of 45% will be eliminated.
- As of November 6, the National Insurance increase announced in April will be reversed, saving money for businesses and 28 million workers. Under former chancellor Rishi Sunak, the 1.25 percentage point rise was implemented.
- Beer, cider, wine, and spirit duty increases were cancelled.
- Stamp duty reductions will begin “today.” For the first £250,000 of a property’s worth, which is twice the currently permitted amount, nothing will be paid. First-time buyer requirements will rise to £425,000 from £300,000. Additionally, the property valuation that first-time buyers can use to qualify for relief will increase from £500,000 to £625,000.
- With help from the energy price guarantee and a £400 grant, household bills are anticipated to be reduced by £1,000 this year. The most vulnerable households, who will receive supplementary payments, will have savings totalling $2,200 this year.
- The estimated £60 billion cost of the entire energy package over the next six months includes business support. Use of their borrowing power to finance temporary measures to support businesses and families was entirely appropriate on the government’s part, he said.
- The Treasury predicts that tax cut policies will cost approximately £45 billion annually by 2026.
- The government’s energy strategy, according to independent forecasters, would lower peak inflation by about five percentage points.
- The independence of the Bank of England is “sacrosanct.”
- In the future, the government will outline its fiscal strategy in greater detail, and the Office for Budget Responsibility will release an economic and fiscal forecast before the year is out.
- As part of attempts to “reaffirm” the UK’s reputation as a financial services powerhouse, the EU-inspired cap on bankers’ bonuses will be eliminated. The chancellor claimed that the bonus cap had no other effect than to raise the base pay for bankers or encourage business outside of Europe.
- The planned increase in corporation tax to 25% for the next year is cancelled. In the G20, they would have the lowest corporation tax rate. This will help the economy by reinvesting nearly £19 billion annually, Mr. Kwarteng said.
- Will introduce legislation requiring trade unions to submit salary proposals for member vote, ensuring that strikes can only be called after complete failure of negotiations.
- To reduce taxes for businesses in certain sites for ten years to encourage investment, job creation, and growth. In discussions on “investment zones” with 38 local and mayoral combined authority regions in England. Aims to spread more broadly throughout the UK.
- New legislation will remove obstacles and restrictions to the construction of new energy, rail, and transportation infrastructure.
- Universal Credit Claimants, 120,000 people, who make less than the equivalent of 15 hours per week at the National Living Wage will be obliged to meet with their Work Coach and take proactive measures to raise their wages or risk having their benefits slashed. The economy’s vacancies are to be decreased.
- Will make the IR35 rules, which govern how temporary workers are paid, by eliminating amendments in 2017 and 2021 that imposed unnecessary complexity and cost for many businesses.
- Offering foreign guests VAT-free shopping.
- Modifying legislation to raise investment by pension funds in UK assets, which would benefit savers, spur economic expansion, and incentivise capital investment in British science and technology firms.
- The Annual Investment Allowance, a tax relief for firms investing in plant and technology, will stay at £1 million permanently rather than bringing it back to £200,000 in March 2023.
