UK's new Chancellor of the Exchequer Jeremy Hunt reversed almost all of the tax measures announced by his predecessor Kwasi Kwarteng in the 'mini-budget' on September 23, which attracted severe criticism for Prime Minister Liz Truss' government and caused a turmoil in the financial markets.
"We remain completely committed to our mission to go for growth, but growth requires confidence and stability - which is why we are taking many difficult decisions, starting today," Hunt said in a speech to the House of Commons.
The chancellor scrapped the plan to cut the basic rate of income tax to 19 percent from April 2023. The government aims to proceed with the cut in due course, but this will only take place when economic conditions allow for it and a change is affordable, the HM Treasury said in a statement.
The basic rate of income tax will therefore remain at 20 percent indefinitely and this is worth around GBP 6 billion a year.
Hunt also abandoned the move to cut the dividends tax by 1.25 percentage points from April 2023. The 1.25 percentage points increase that took effect in April 2022 will now remain in place and is valued at around GBP 1 billion a year.
by Jyotsna V
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