The basic rate of income tax will fall from 20p to 19p in the pound next year, the chancellor says.
Image source, Getty ImagesThe chancellor has announced the basic rate of income tax will be cut from 20p to 19p from April next year.
Kwasi Kwarteng said the cut in the tax people pay on earnings to 19% would benefit more than 31 million people.
The cut in the basic rate of income tax, applies to people that earn between £12,571 to £50,270, comes a year earlier than planned.
In a surprise move, the UK’s 45% highest tax band for people who earn over £150,000 a year has been axed.
The chancellor said high tax rates “damage Britain’s competitiveness” and reduce incentives for new businesses.
Mr Kwarteng said scrapping the 45% rate of tax rate would also “reward enterprise and growth”.