Hunt Hikes Tax for UK’s Top Earners to Fund Help for Poorest
Hunt raised taxes for the biggest earners as he sought to stabilize the public finances and shield the most vulnerable families from recession.
Chancellor of the Exchequer Jeremy Hunt raised taxes for the UK’s biggest earners as he sought to stabilize the public finances and shield the most vulnerable families from recession.
Hunt said he will lower the threshold for paying the top 45% rate of income tax to £125,140 ($150,000) from £150,000 alongside a raft of measures to help pensioners and poorer households. People earning £150,000 a year will pay an additional £1,200 a year as a result, he said.
The Treasury chief has been tasked with steadying the ship after one of the most chaotic periods in British history, after his predecessor Kwasi Kwarteng’s push for unfunded tax cuts sparked a run on the pound. Since taking office last month, he’s been warning the British public -- and the Tory backbenchers who’d cheered on the tax cutting plan -- that he would have to take “difficult decisions” to win back the confidence of investors.
“Today we deliver a plan to tackle the cost-of-living crisis and rebuild our economy,” Hunt told the House of Commons on Thursday. “We also protect the vulnerable because to be British is to be compassionate and this is a compassionate Conservative government.”
Hunt said he’ll also maintain the thresholds for paying national insurance and inheritance tax through 2028, dragging more people into paying higher taxes as surging inflation pushes up prices.
He also raised state pensions and benefits by 10.1%, in line with inflation, boosted the minimum wage to £10.42, a 9.7% increase, and capped rent hikes for social housing at 7%.
Read More: Hunt Pitches Tax Rises, Spending Cuts Into UK’s Economic ‘Storm’
(Updates with comment from Hunt in fourth paragraph)
More stories like this are available on bloomberg.com
©2022 Bloomberg L.P.