U-turn on Top Rate of Tax

45p income tax on the over £150k earners will now not be scrapped

September’s emergency budget was hit with huge criticism and market turbulence following the Chancellor’s announcements on a series of ‘growth measures’. Chancellor Kwasi Kwarteng has now backtracked on the decision to abolish the 45 pence rate of income tax paid by people earning £150,000+ per year, in response to it being deemed unfair in light of rising living costs.

Following the mini budget, markets reacted poorly, resulting in a falling pound, higher interest rates and a collapse in mortgage products. The Bank of England then stepped in and calmed market turmoil. We will keep you updated on the effects of this and other decisions on this matter ahead of the new tax year, starting 6 April 2023.

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