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Monday, 03 October 2022 12:41

U-turn on plans to scrap 45p rate of income tax

HM Treasury HM Treasury

Chancellor Kwasi Kwarteng has confirmed the Government has u-turned on the plans to scrap the 45p rate of income tax. 

 

The 45p rate of income tax is paid by those earning more than £150,000 a year. Removing the 45p tax rate would reduce the tax paid by higher earners by 5% to 40%. 

 

The plan to scrap the 45p rate was announced in the Chancellor's mini budget on 23 September as part of a package of tax cuts worth £45bn. 

 

Scrapping the rate was strongly opposed by the markets, other parties and a growing number of Conservative MPs. 

 

The tax cuts in the mini budget were criticised by the International Monetary Fund (IMF) on Friday and subsequently the Bank of England reacted with a £65bn emergency intervention. 

 

Speaking on the U-turn, Kwasi Kwarteng said the Government had changed course because it had seen and herd the level of opposition to the move.  

Last modified on Monday, 03 October 2022 14:08

        

 
 

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