Kwasi Kwarteng has announced the biggest bundle of tax cuts since 1972 in his first fiscal statement as Chancellor. Income tax, corporation tax and stamp duty make up the majority of the most significant cuts in a bid to promote growth within the economy.
The basic rate of income tax will decrease by 1% to 19% from April 2023, and the 45% additional rate for top earners will be
scrapped altogether. The stamp duty threshold for house-buyers in England and
Northern Ireland will be doubled from £125,000 to £250,000, and first-time buyers will not pay stamp duty on homes worth £425,000.
The Chancellor estimated that the energy bill relief scheme, announced earlier in September, would be worth more than £60bn over the next six months from October.
As anticipated, the Government is reversing the 1.25% percentage point increase in National Insurance, effective immediately. The planned rise in corporation tax will also be scrapped, along with the cap on bankers’ bonuses.
The Government will also introduce low-tax investment zones, VAT-free shopping for overseas visitors and tighter rules for people receiving Universal Credit.