Mini-budget cutting tax for millions to be announced this week
The chancellor is expected to announce a mini-budget this week, bringing in tax cuts for millions. The outline proposals are expected on Friday 23 September.
The new Chancellor Kwasi Kwarteng is expected to confirm some tax reversals.
The new plan is expected to include:
- A reversal of the National Insurance increase.
- Energy price caps and suspending the green levy on energy bills.
- Scrapping the proposed corporation tax uplift to 25%
- Removing the bankers’ bonus cap.
NI increase reversal
The changes will come into effect on:
- A reversal of the National Insurance increase.
- Energy price caps and suspending the green levy on energy bills.
- Scrapping the proposed corporation tax uplift to 25%
- Removing the bankers’ bonus cap.
Suspending the green levy on energy bills
Ms Truss has previously pledged to reduce energy bills further by suspending the green energy levy. Green levies are an environmental charge which is used to fund green energy policies, improvements to energy efficiency and long-term energy security.
The charge makes up around eight percent of the average energy bills and scrapping it could save households £150 a year.
Scrapping the corporation tax uplift
The planned rise in corporation tax from 19% to 25% in April 2023 is expected to be scrapped, in a move that will cost the Treasury billions of pounds. Liz Truss stated however that this would boost Britain’s competitiveness and growth.
Bankers’ Bonuses
Mr Kwarteng is also believed to be considering getting rid of the cap of bankers’ bonuses, with City bosses complaining about EU-wide rules limiting them to twice an employee’s salary.
They say that this leads to higher base pay, pushing up costs for companies, and that it makes the UK a less attractive business destination.
Summary
Parliament is due to resume normal business on Thursday 22 September, following the official mourning period and Queen’s state funeral. The announcement is then expected to be made on Friday 23rd September.
The corporation tax reversal will be welcomed by many businesses and help much needed business growth over the next 12 months.
We’ll keep you posted on the outcome next week but in the meantime if you need some assistance, please don’t hesitate to get in touch.
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