Effy.- British Economy Minister Jeremy Hunt announced on Thursday tax increases on citizens and companies in order to reduce net debt compared to GDP by 2028.
Hunt lowered from £150,000 (€171,000) to £125,140 (€143,240) the income threshold at which the highest band of income tax would be paid, 45%, while he would freeze the tax relief rate rather than increase it. Profits, in order to include more taxpayers in the coming years.
The conservative minister will also raise the temporary tax on extraordinary profits of oil and gas companies from 25 to 35% and will impose a temporary rate of 45% on those surpluses for energy generators.
It has also frozen at the current level the non-taxable scope of social security contributions and property transfer tax, while it will be reduced from 2,000 (2,291 euros) to 1,000 pounds (1,145 euros) in 2023 and to 500 (572 euros) in 2024. That of dividends.
Hunt has scrapped the road tax credit for electric cars and will increase the rate on commercial premises.
The minister also plans to cut public spending in order to balance state finances and provide confidence to financial markets, which were destabilized after the fiscal plan announced by the previous Conservative government led by Liz Truss on September 23.
Hunt stressed that state investments, which include aid, which has now been reduced, to cover the energy bill, will continue to grow “in real terms” in the next five years, “but at a slower pace,” and stressed that basic public services will receive priority.
Ministries will have to work on finding “efficiency measures” to compensate for high inflation, which has exceeded 11%, and the defense budget will be equivalent to 2% of GDP (compared to the 3% previously promised by the “Conservatives”).
Read: Inflation in Britain reaches its highest level in 41 years. They prepare tax increases
The international cooperation budget will remain at the 0.5% of GDP introduced in the pandemic, compared to 0.7% previously, and the NHS will have to look for savings, although it will receive a £1,000 million investment. . €1,143 million) this year, along with £1.7 billion (€1,943 million) for social care.
Hunt said social benefits and pensions would rise by 10.1% next year, in line with inflation (measured last September).
With tax increases and spending cuts, Rishi Sunak's executive plans to generate £55 billion (about €63 billion) in the next five years, a self-imposed fiscal consolidation target that some economists consider unnecessary by promoting austerity.
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