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British Finance Minister Jeremy Hunt announced a series of tax increases and a more austere approach to public spending on Thursday, November 17, in a budget plan of 55,000 million pounds sterling. We review some of the changes.
More taxes and less spending are the essence of the highly anticipated emergency budget presented by the UK Government with which it aspires to get out of a recession in which, it acknowledges, it is already immersed.
The head of the Finance portfolio, Jeremy Hunt, confirmed that inflation will remain above 9% year-on-year by the end of the year and that a drop in Gross Domestic Product of 1.4% is expected for 2023.
The £55bn plan includes lowering the tax base threshold for paying top income tax, as well as a windfall tax increase for mining and energy companies.
Labor Party leader Keir Starmer criticized the plan. “Britain is falling behind on the world stage while mortgage, food and energy costs go up and up,” he said.
I love this country. But the Tories are holding us back.
Britain is falling behind on the global stage, while mortgages, food and energy costs all go up and up.
Our country needs a plan for growth, and an economy that works for working people.
That’s Labor plan.
—Keir Starmer (@Keir_Starmer) November 17, 2022
More citizens will pay a maximum tax
It cost former Prime Minister Liz Truss her job for trying to completely abolish the top 45% income tax rate paid by the richest.
Under the new plan, the tax base increases. In other words, the British with the highest income will now pay that maximum tax rate on their income when they are greater than 125,140 pounds a year, instead of the previous 150,000 pounds.
The Government, in addition, will freeze until April 2028 the income threshold with which people do not pay taxes and will eliminate the exemption from the payment of vehicle tax for electric cars from April 2025.
Dividends are also included. Hunt said he will reduce the minimum value at which company shareholders begin to pay taxes on the dividends they receive.
More taxes on sectors benefited by the war
Britain’s tax on the profits of oil and gas companies will increase from 25% to 35% from January next year to March 2028. Hunt also announced a new temporary 45% tax on electricity generators, designed to aim at the high profits obtained by clean energy generators.
Among other measures, the government of Rishi Sunak promised to raise public spending at a level slower than the economy and to maintain until April 2028 benefits for employers who pay National Insurance contributions for their workers.
With Reuters, AP and EFE
