Mini Budget 2022: The major tax cuts to be revealed TOMORROW to help millions of families save in cost of living crisis
FAMILIES across Britain are in for a tough winter as the cost of living crisis continues to crunch household finances.
But TOMORROW Kwasi Kwarteng will finally step in with a mini budget he says will provide much needed relief.
With inflation sitting at a staggering 9.9 per cent and energy prices soaring through the roof, the Chancellor believes slashing taxes is the best remedy to Britain’s economic crisis.
Tomorrow he’s set to announce billions of pounds worth of them.
The tax cuts come alongside a number of other policies already revealed to aid economic growth and help households pay bills.
These include the energy price guarantee, which will see bills capped at £2,500 and cost of living payments.
Some tax cuts target business and the city, while others are directly aimed at keeping hard-earned money out of government coffers and in working people’s pockets.
Liz Truss has advocated for a low tax Britain for a long time.
During the Tory leadership race, she vowed to impose at least £30 billion worth of cuts within weeks of entering No10.
And on Tuesday she even pledged to unleash a tax slashing revolution, overhauling the system to lower the burden on Brits.
Friday’s mini budget in the Commons chamber will be the beginning of her big tax bonfire.
Here’s the changes you can expect to see.
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HEALTH AND SOCIAL CARE LEVY
The Chancellor is expected to slash the Health and Social Care Levy that was brought in under Boris Johnson’s administration last April.
During the Tory leadership campaign Ms Truss said she hated the national insurance hike and vowed to get rid of it.
For some people it means paying the government hundreds of pounds extra a year.
On Friday it’s set to be scrapped.
Critics say it will disproportionately benefit richer workers because they earn more and so will save more.
Here is a breakdown of how much you will save from the reversal:
– A worker on £25,000 will save £155 a year
– A worker on £40,000 will save £343 a year
– A worker on £100,000 will save £1,093 a year
Anyone who earns less than £12,570 a year will continue not to pay any National Insurance at all.
STAMP DUTY
The Sun understands that Ms Truss has been working secretly on plans to axe stamp duty.
The Chancellor want to kick-start a house-buying revolution by slashing the tax.
Sources say he may double the threshold at which people pay the levy.
Currently, no duty is paid on the first £125,000 of any home buy. Mr Kwarteng is considering raising this to £250,000.
For first-time buyers the threshold would rise from £300,000 to £600,000.
INCOME TAX
Mr Kwarteng MIGHT announce that the basic rate of income tax will be slashed from 20p to 19p.
The PM wanted to make the cut in 2024, but Whitehall sources think it will be sooner.
While that may not be tomorrow it’s a move to keep a close eye on.
The exact date the cut would kick in also isn’t yet known but should be confirmed soon.
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CORPORATION TAX
A planned rise in corporation tax for April next year is likely to be binned on Friday.
The idea is that by keeping taxes lower, major companies will have more money to invest in the British economy, ultimately helping it to grow.
The levy on business’ profits was due to rise from 19 per cent to 25 per cent.
Reducing costs on businesses should mean shoppers pay less for products – in a win for consumers.
But the overall benefit will be impossible to calculate for now.