Liz Truss has now been forced to sack her right-hand man, the Chancellor of the Exchequer, Kwasi Kwarteng. This drastic action has put her own position is jeopardy and many media sources are speculating that she may soon be forced out of No 10.
Both Kwasi and Liz believe in a low-tax high growth economy and co-authored a book titled Britannia Unchained (Global lessons for growth and prosperity). However, the turmoil in the capital markets indicates it is important to balance the books and tax cuts need to be clearly funded by other tax inflows.
As a result, Liz has been forced into yet another embarrassing U-turn by reinstating Rishi Sunak’s proposal to increase corporation tax rates from the current 19% to 26%.
This follows the reinstatement of the 45% tax band for additional rate taxpayers by Kwasi.
This still feels like too little too late, and I expect to see the 200% CAP on banker bonuses which was earlier abolished also being reinstated. In addition, the proposed increase in national insurance may also have to be introduced again.
Liz Truss is hopeful of restoring public confidence with the appointment of Jeremy Hunt who is an experienced politician and has survived many political storms in the past.
With Penny Mordaunt and Rishi Sunak waiting in the wings to come to the rescue of the Conservative Party, it does look like Rishi was a much safer pair of hands for the UK economy.
Sadly, Kwasi is likely to be remembered more for his mistakes such as reducing the tax for millionaires instead of introducing the revolutionary 19% income tax rate.
If you are planning on doing Taxation or Advanced Tax in December 2022 /March 2023, I recommend you purchase Tax Condensed or Advanced Tax Condensed which will allow you to learn the technical rules at lightning speed.
You can purchase it using the link below:
#tax #minibudget2022 #neildacosta #kaplan
Recent Comments