In an update to the Mini Budget, there has been a U-Turn on the 45p rate of Income Tax. Kwasi Kwarteng announced that the measure he announced on 23 September to abolish the 45% rate of tax that applies to income above £150,000 a year, would not happen. The cost of this cut was estimated at about £2 billion a year, but it appeared to have been pressure from fellow MPs and the public, that caused the change of policy.
Mr Kwarteng’s statement said:
“It is clear that the abolition of the 45p tax rate has become a distraction from our overriding mission to tackle the challenges facing our country. As a result I am announcing that we are not proceeding with the abolition of the 45p tax rate.”
You can read our updated Mini Budget summary report here.