Following Kwasi’s ill-thought-out proposal to reduce the rate of tax for additional rate taxpayers from 45% to 40%, the financial markets responded adversely with sterling dropping to a historic low against the US dollar.

According to the Treasury, 660,000 of the richest people in the UK were now going to pay £10,000 less in tax a year.

Liz Truss, our PM, originally gave the impression that changing the budgetary proposal was not an option and like the legendary Margaret Thatcher she was not going to back down.

However, the political rhetoric gradually changed to the millionaire tax cut being ‘Kwasi’s idea’ and today, Kwasi admitted his mistake and said he had listened to the people.

In a dramatic U-turn, he has reversed his position and retained the 45% additional tax rate for income in excess of £150,000.

It is important to note that there were lots of good proposals in the budget such as the reduction in the basic rate of income tax to 19% and abolishing the increase in the rate of national insurance. These measures (including the assistance with energy costs) will affect all the taxpayers and greatly assist with the current cost of living crisis.

Kwasi is an intellectual giant who won prizes at Cambridge as well as being a Kennedy Scholar at Harvard, so he is fully capable of managing the UK economy. Liz Truss is a CIMA qualified management accountant so financial stewardship should come naturally to her.

Kwasi called the U-turn ‘a little turbulence’ and for a new Chancellor it certainly was a baptism of fire.

 I am so pleased that the unending IR-35 war on freelancers working through their own companies seems to be reaching a truce. Fingers crossed that this is Kwasi’s only U-Turn.

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