Mini budget 2022 LIVE: Stamp duty dramatically sliced in Kwasi Kwarteng’s ‘staggering’ £45bn tax cut bonanza
- National insurance and income tax both slashed
- Booze duty frozen to cut alcohol costs
LIZ Truss today unleashed the biggest tax cuts bonanza since the 1970s to make millions of Brits better off within weeks.
Chancellor Kwasi Kwarteng unveiled a bumper "mini-Budget" where he slashed national insurance, income tax and stamp duty.
The triple-whammy spree was followed by a freeze on alcohol duty so the hefty levies on booze will not rise with soaring inflation.
And Mr Kwarteng altogether abolished the top 45p rate of income tax and scrapped the planned hike in corporation tax.
Benefit claimants will also face tougher penalties for failing to look for work as ministers aim to plug record job vacancies.
Laying out his "new era for Britain", the Chancellor said his tax cuts bazooka would "turn the vicious cycle of stagnation into a virtuous cycle of growth".
But the £45billion tax bonfire - that comes on top of the £60billion energy package - is a huge gamble as Ms Truss goes for broke on her mission to get economic growth.
Read our Mini Budget 2022 live blog below for the latest...
Pound plummets to 37-year low
The pound sank to a fresh 37-year low as the Chancellor unveiled tens of billions of pounds of tax cuts and spending.
Equity markets were also particularly downbeat, with the FTSE 100 plunging to its lowest in two months.
Sterling declined by as much as 0.89 per cent to 1.115 US dollars as Kwasi Kwarteng spoke to Parliament at 9.30am on Friday.
Banks to benefit from mini budget
The banker bonus cap has been scrapped by The Chancellor.
Kwasi Kwarteng made the announcement this morning.
The bonus cap, until today, limited payouts to two-times bankers.
It is not yet known if this will create more jobs in the banking industry.
Oil princes plummet
Prices have fallen to its lowest since Janurary.
Benchmark Brent crude sank 5pc to below $86 a barrel and West Texas Intermediate was trading below $80 for the first time since the beginning of the year.
The pound tanks as it hits biggest one-day drop since March 2020
The pound is moving closer to an all-time low of $1.0520.
Markets analyst Neil Wilson Tweeted: "this is the worst day I've ever seen in the markets from a British perspective."
Mini budget latest
- Stamp Duty was cut to save homebuyers thousands of pounds and get more people on property ladder
- A planned hike in corporation tax was axed
- Boozers were handed a huge boost today as alcohol price hikes were scrapped by the Chancellor
- Duty free shopping will now be available outside of airports for holidaymakers
- Taxes will be slashed for thousands of Brits living in investment zones
Controversial tax rule axed
The controversial IR35 tax rules will be axed from April next year, Chancellor Kwasi Kwarteng revealed in the emergency mini budget.
The IR35 tax scheme hits self-employed workers who have set themselves up as private companies.
This includes self-employed workers like delivery drivers, building contractors and many others who mainly work for other businesses who are not on the payroll.
Under the current IR35 system, the business that you work for, rather than yourself, is responsible for deciding your tax status.
It can often mean self-employed workers can pay unnecessary costs.
Alcohol duty to be cut
A rise in alcohol duty is among a raft of measures that have been scrapped by the Chancellor in the Commons today.
Kwasi Kwarteng insisted he had “listened to industry concerns” about future rises to the cost of a pint.
And in response, he said planned hikes to duty rates for beer, as well as cider, wine, and spirits, “will all be cancelled”.
Read more here.
Tax cuts amount to £45billion
Today’s tax cuts will cost the Treasury £45billion, according to top economist Paul Johnson.
The IFS boss tweeted: “This is the biggest tax cutting event since 1972. Barber’s “dash for growth” then ended in disaster. That Budget is now known as the worst of modern times.”
The IFS puts the “mini budget” in perspective to past Budgets.
How much will you save on income tax?
The Chancellor announced massive changes to the British economy this morning, including a 1p cut in income tax.
This cut will see 31million people save £170 on average next year, according to government estimates.
But how much will you save?
Click here to read more.
What did Kwasi Kwarteng say about his new £45m budget?
Announced this morning, Mr Kwarteng said his new budget " will deliver higher wages and greater opportunities."
He went on to say: "That is how we will compete successfully with dynamic economies around the world. That is how we will turn the vicious cycle of stagnation into a virtuous cycle of growth.
"The Prime Minister has acted with great speed to announce one of the most significant interventions the British state has ever made.
"People need to know that help is coming. And help is indeed coming."
How much National Insurance will you save?
Following the Chancellor's all-encompassing "mini budget" announcement today, Brits everywhere will see a cut to their National Insurance payments.
But, how much will you save?
Savings will range from £93 to a staggering £1,093 depending on earnings.
Click here to read more.
Young buyers jubilant over Stamp Duty change
Young Brits looking to buy a home have seen a huge outgoing scrapped today, with the changes to Stamp Duty announced in the mini budget.
, 24-year-old Emily hailed the change.
“We are ecstatic, absolutely over the moon!” she said.
“We had been expecting to pay £5,000 in stamp duty but now we will be able to use that money for furniture and some work on the property.”
Click here for more information about Stamp Duty.
Labour responds to huge budget announcements
Labour's shadow chancellor Rachel Reeves said Kwasi Kwarteng had provided a “comprehensive demolition” of the last 12 years of Tory government.
Responding in the Commons to the Chancellor’s statement on the economy, Ms Reeves said: “Can I thank the Chancellor on his comprehensive demolition of the record of that last 12 years. Their record, their failure, their vicious circle of stagnation.”
Today's announcements, which have been described as a "mega budget" rather than the proposed "mini budget", included huge tax cuts to NI, Stamp Duty and other bills.
Major boost for the British economy
Duty Free shopping will now be available on the high street, but the tax discount will only apply to non-British passport holders.
When shoppers buy products they pay a number of taxes on them, such as VAT.
These taxes are already factored in to the sales price - so you might not realise they are there.
Duty free makes products cheaper by removing local taxes, with the expectation the purchase will leave the country.
Tourists used to be able to reclaim VAT before they left the country at airports and refund agencies.
But Rishi Sunak removed the ability when he was Chancellor.
The move was criticised because it saw big budget shoppers choose Paris and New York as their go-to retail destination over London.
Now, Kwasi Kwarteng will bring the tax rebate back.
Kwasi delivers biggest tax cuts in 50 years
Kwasi has given families extra help during the cost of living crisis after announcing his plans to cut taxes.
Mr Kwarteng said: "We will deliver higher wages, greater opportunities, and fund public services, now and into the future.
"That is how we will compete successfully with dynamic economies around the world. That is how we will turn the vicious cycle of stagnation into a virtuous cycle of growth."
Mini budget latest
- Stamp Duty was cut to save homebuyers thousands of pounds and get more people on property ladder
- A planned hike in corporation tax was axed
- Boozers were handed a huge boost today as alcohol price hikes were scrapped by the Chancellor
- Duty free shopping will now be available outside of airports for holidaymakers
- Taxes will be slashed for thousands of Brits living in investment zones
Pubs receive massive boost
Pubs received a huge boost today as alcohol price hikes were scrapped.
Mr Kwarteng said he had "listened to industry concerns" about future rises to alcohol duty - which would see the cost of a pint rocket.
And in response, he said planned hikes to duty rates for beer, for cider, for wine, and for spirits "will all be cancelled".
The Chancellor said he would introduce an "18-month transition" for wine duty, while extending draught relief to help smaller breweries.
Union fury at Kwasi's crackdown
The Chancellor has put himself on a collision course with trade unions by announcing plans to legislate to require them to put pay offers from employers to a vote of members.
Responding to the Chancellor's comments, Mick Lynch, general secretary of the Rail, Maritime and Transport (RMT) union, said: "We already have the most severe anti-democratic trade union laws in western Europe and this latest threat will rightly enrage our members.
"The Government should be working towards a negotiated settlement in the national rail dispute, not seeking to make it even harder to take effective strike action."
Pound plummets to 37-year low
The pound sank to a fresh 37-year low as the Chancellor unveiled tens of billions of pounds of tax cuts and spending.
Equity markets were also particularly downbeat, with the FTSE 100 plunging to its lowest in two months.
Sterling declined by as much as 0.89 per cent to 1.115 US dollars as Kwasi Kwarteng spoke to Parliament at 9.30am on Friday.
Mini-Budget is "staggering", says Martin Lewis
Consumer money expert Martin Lewis described the Government's financial plan as "staggering" after the so-called mini-budget from Chancellor Kwasi Kwarteng was announced.
Lewis, founder of Money Saving Expert, tweeted: "That really was quite a staggering statement from a Conservative Party government.
"Huge new borrowing at the same time as cutting taxes.
"It's all aimed at growing the economy. I really hope it works. I really worry what happens if it doesn't."
Hints at fuel duty cut
Kwasi Kwarteng hinted he could extend the 5p fuel duty cut at the full Budget.
Responding to Tory MP Rob Halfon's demands to keep petrol prices down, the Chancellor said he will definitely look at the tax.
Income tax cut will save an average £170
Next year's 1p income tax cut will save 38million people an average £170, according to government estimates.
The basic rate of income tax will drop from 20p to 19p next year, Mr Kwarteng announced today.
Tax cuts amount to £45billion
Today's tax cuts will cost the Treasury £45billion, according to top economist Paul Johnson.
The IFS boss tweeted: "This is biggest tax cutting event since 1972. Barber's "dash for growth" then ended in disaster. That Budget is now known as the worst of modern times."
The IFS puts the "mini Budget" in perspective to past Budgets.
Mini-Budget is "admission of Tory failure", says Labour
Shadow Chancellor Rachel Reeves said Kwasi Kwarteng's massive Budget was an admission the past 12 years of Tory rule has not worked.
She said: "Lower growth, lower investment, lower productivity and today we learn that we have the lowest consumer confidence since records began.
"The only things that are going up are inflation, interest rates and banker bonuses."
Labour slams Kwasi's mini-Budget
Labour shadow chancellor Rachel Reeves said Kwasi Kwarteng had provided a "comprehensive demolition" of the last 12 years of Tory government.
Responding in the Commons to the Chancellor's statement on the economy, Ms Reeves said: "Can I thank the Chancellor on his comprehensive demolition of the record of that last 12 years. Their record, their failure, their vicious circle of stagnation."
