This week, analysts announced that they expected economic growth to stall and the Bank of England warned the UK will fall into recession towards the end of the year, so there was pressure on the Prime Minister to allay the fears that the markets, businesses and the general public were all feeling.
Earlier in the day, it was announced that Chancellor, Kwasi Kwarteng, had been asked to step-down from his role, with confirmation made around lunchtime, and Jeremy Hunt will now take over his role within the cabinet.
In the Prime Minister’s press conference itself, she confirmed the reports, which had already been predicted in the media, that she will be reversing the Government’s planned freeze on Corporation Tax, confirming that it will rise to 25% as previously announced by another former Chancellor, Rishi Sunak. The increase in the Corporation Tax, due to take effect in April 2023, is expected to raise an extra £18bn in taxes for the country each year.
The Prime Minister maintained that the goal was to ‘deliver a low tax, high growth economy’ but said this was an important step to reassure the markets of ‘our fiscal discipline’ and that the previously announced mini-budget had gone ‘further and faster than expected’.
The news follows the announcement that the scrapping of the top rate of income tax, also announced in the mini-budget, would also not be going ahead as planned.
If you have any questions regarding this change and what it could mean for your business, speak to your Client Services Director or get in touch with us directly.