Facing huge criticism and market turbulence following his announcement of a series of “growth” measures, Chancellor Kwasi Kwarteng has today (Monday 3rd October) reversed the decision on the tax cut for the highest earners. He has confirmed he will not pursue cutting the 45p rate of income tax on people earning more than £150,000 a year. The proposal to scrap the rate had been criticised as unfair at time of rising living costs.
Following the mini budget markets reacted poorly and we saw a falling pound, higher interest rates, a collapse in mortgage products and the Bank of England stepping in to calm markets. Prime Minister Liz Truss has admitted yesterday she should have “laid the ground better” for her mini budget, after it sparked days of market turmoil.
We will keep you updated on the effects of this and other decisions in good time for the new tax year which commences 6 April, 2023.