LONDON, Nov 17 (Reuters) – More Britons will pay the highest rate of tax under a government plan unveiled on Thursday to ease benefits and lower the rate at which people pay the rate. highest as part of measures to stabilize public finances.

Chancellor of the Exchequer Jeremy Hunt said Prime Minister Rishi Sunak’s new Conservative government was “asking more of those who have more” as it also set out plans to close national insurance and tax caps. legacy

Hunt said the government would freeze the income tax allowance until 2028 and lower the tax rate from 125,140 pounds ($148,053) to 150,000 pounds. maximum 45%.

The effect of the changes is that more Britons’ incomes will fall within the new threshold and end up paying more tax due to the cost of living effect.

“We will still have the largest tax-free allowance of any G7 country,” Hunt told parliament in a speech aimed at restoring market confidence in public finances after 50 days Prime Minister Liz Truss.

His government has said it will scrap the top rate of tax, before heading back into the financial chaos caused by its plans. He was forced to resign last month and was replaced as prime minister by Sunak.

The Conservatives promised in their 2019 election manifesto not to raise income tax or national insurance rates.

Hunt said that although his announcement would lead to a significant increase in taxes, the government did not increase the amount of taxes.

MORE TAXPAYERS

Anthony Whatling of Evelyn Partners, a professional investment firm, said a quarter of a million more people in Britain would pay higher taxes as a result of the government change.

The Office for Budget Responsibility (OBR), Britain’s independent financial watchdog, said the decision to freeze the allowance would raise an extra £26 billion for the government in the 2027 financial year. -2028.

The OBR said it estimated 3.2 million new taxpayers would be created by six years’ worth of personal allowances.

He said the break would take the value of personal allowances in 2027-28 back to 2013-14 levels.

In addition to the income tax changes, the government also said it would cut the amount of dividends that shareholders receive before they start paying tax from 2,000 pounds ( $2,366) now to 1,000 pounds next year and 500 pounds starting in 2024.

The amount people can claim in income tax will fall from 12,300 pounds now to 6,000 pounds next year and 3,000 pounds in 2024, Hunt said.

($1 = 0.8452 pounds)

Reporting by Andrew MacAskill; Editing by Michael Holden and Alexander Smith

Our Standards: The Thomson Reuters Trust Principles.



Source link