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Mini Budget 2022: Chancellor Kwasi Kwarteng cuts stamp duty, basic and basic income tax rates – live | Mini-budget 2022

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Here is a chart from growth plan document showing the cost of the tax cuts announced today.

The main cost for 2023-34 is £26.7bn. But that estimate includes £10.4bn of revenue from the Energy Revenue Levy (a measure that has already been announced) and if you exclude that, the tax cuts announced today will cost around £37bn next financial year .

Considering that today for the first time we received the calculation of the package of electricity bills (see 9.42 am)Kwasi Kwarteng announced the measures, which will cost the exchequer around £100 billion.

The cost of tax cuts announced by Kwarteng Photo: Her Majesty’s Ministry of Finance

Government bond yields rose to their highest level since 2008

Graham Worden

Graham Worden

UK government bond prices are falling as the city reacts to increased borrowing needed to finance Kwasi Kwarteng’s mini-budget.

The yield (effectively the interest rate) on two-year British gilts jumped to its highest level since 2008. It rose to 3.76%, a jump of 25 basis points today (a really sharp daily move).

Yields rise when prices fall, so that suggests investors are anticipating a surge in additional gilts to be issued to pay for today’s unwarranted tax cut.

Benchmark 10-year gilt yields also jumped to their highest level since 2011.

Gilt yields have risen by 20-25 basis points since KK went up. This is a significant increase in the cost of new government borrowing.

— Patrick Hosking (@HoskingTheTimes) September 23, 2022

Some rebound in sterling, as I expected, gilt yields rose on the announcement of unwarranted tax cuts and much more borrowing. https://t.co/gW0lN33Zrm

— Frances “Cassandra” Coppola (@Frances_Coppola) September 23, 2022

Kwarteng says the top rate of income tax is being scrapped and the basic rate is falling to 19% from April next year

Quarteng concludes with two income tax announcements.

He says the top rate of income tax – the 45% rate on incomes over £150,000 – is being scrapped entirely.

He says Work never had a 45% income tax rate when he was in power.

And he says the government will cut income tax by 1p in the pound from April next year. That’s a year earlier than planned and will bring the rate down to 19%, he says.

This means that we will have one of the most competitive and progressive income tax systems in the world.

That’s all. He finished his speech.

Kwarteng says the stamp duty is going down from today

Quarteng confirms that the increase in national insurance is being canceled from November.

And he says the stamp duty is going down. There will be no stamp duty on the first £250,000, and for first-time buyers the threshold will be £425,000, he says.

According to him, this measure will save more than 200,000 buyers from paying stamp duties.

He says the cuts are permanent and take effect today.

Quarteng says planned increases in duty rates on beer, cider, wine and spirits will be scrapped.

Quarteng says the government will introduce VAT-free shopping for tourists.

Quarteng says the annual investment allowance will not be cut as planned.

He says he will abolish the Office of Tax Simplification because all of its officials will be focused on tax simplification.

The remaining EU rules will be repealed (ie repealed unless the government decides to reinstate them) from December 2023.

Kwarteng confirms cancellation of planned corporate tax increase

Quarteng confirms that the government will review the tax system.

He says that the planned increase in the corporate tax next year will be abandoned.

Low taxes encourage investment, he says.

Kwarteng says that investment zones with low taxes can be established in almost 40 districts

Quarteng confirms that the government is creating “new investment centers”

We will reduce taxes for businesses in certain tax jurisdictions for 10 years. There will be accelerated tax relief for structures and buildings and 100% tax relief for qualifying investments in plant and equipment, for the purchase of land and buildings for commercial or new residential development.

There will be no stamp duty for the payment of new business premises. There will be no business rates and if a company hires a new employee into the tax office, the employer will not pay any National Insurance on the first £50,000 they earn.

He says the government is discussing the creation of such zones in almost 40 places.

Kvarteng confirms the removal of the restriction on bonuses to bankers

Quarteng says he will change the pension levy cap to make it easier for pension funds to invest in UK assets.

He confirms that he will lift the cap on bankers’ bonuses.

https://www.theguardian.com/politics/live/2022/sep/23/mini-budget-2022-chancellor-kwasi-kwarteng-tax-cuts-live

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