Planned corporation tax rise to be scrapped

The measure was one of a number outlined in new chancellor Kwasi Kwarteng’s “mini-budget” today (23 September), in which he also confirmed the cap on bankers’ bonuses will be axed. 

Additionally, he revealed a package of major cuts to Stamp Duty Land Tax, with the nil rate band being doubled from £125,000 to £250,000 - saving the standard buyer in England £2,500. 

As well as this, first buyers will now pay no stamp duty for properties worth up to £425,000 and increase the value of the property on which first-time buyers can claim relief from £500,000 to £625,000. 

Kwarteng also reconfirmed the government’s Energy Bill Relief Scheme, which will provide a discount on wholesale gas electricity prices for all non-domestic customers - including UK businesses and those in the voluntary sector - whose current gas and electricity prices have been significantly inflated. 

This will be applied to fixed contracts agreed on or after 1 April 2022 for those on variable and flexible tariffs and contracts. It will apply for an initial six-month period from 1 October 2022 for all non-domestic energy users. 

Kwarteng also announced today the government would be canceling the planned rise in corporation tax, keeping it at 19%, and reversing the 1.25 percentage point rise in National Insurance contributions. 

Overall, its plan sets the target for a 2.5% trend of growth. Kwarteng explained: “Economic growth isn’t some academic term with no connection to the real world. 

“It means more jobs, higher pay and more money to fund public services, like schools and the NHS. This will not happen overnight but the tax cuts and reforms I’ve announced today – the biggest package in generations – send a clear signal that growth is our priority.

“Cuts to stamp duty will get the housing market moving and support first-time buyers to put down roots. New Investment Zones will bring business investment and release land for new homes in communities across the country. 

“And we’re accelerating new road, rail and energy projects by removing restrictions that have slowed down progress for too long. We want businesses to invest in the UK, we want the brightest and the best to work here and we want better living standards for everyone.”

The money to fund these costs will be financed by borrowing. According to shadow chancellor Rachel Reeves, this will mean working people will be “left to pick up the bill”. 

She added: “Borrowing higher than it needs to be, just as interest rates rise. And yet the Chancellor refuses to allow independent economic forecasts to be published which would show the impact of this borrowing on our public finances on growth and inflation.

“It is a budget without figures. A menu without prices.”