The Prime Minister Liz Truss has u-turned on corporation tax, with plans to go ahead with the increase to 25% from April 2023, after sacking Chancellor
This will raise £18bn for the Exchequer and will see corporation tax for larger businesses increasing from 19% to 25%.
Truss said: ‘Parts of our mini Budget went faster than markets were expecting. We need to act now to assure markets of our fiscal discipline – we have decided to keep corporation tax rise and this will raise £18bn a year.’
However, this still leaves an estimated £25bn in unfunded tax cuts.
She added: ‘We will control the size of the state to ensure taxpayers’ money is always well spent. Spending will grow less rapidly than originally planned.
Today I have asked Jeremy Hunt to become the new Chancellor – he shares my convictions for this country.
‘I’m absolutely determined to see through what I promised – to see us through the storm we face.’
On the sacking of Chancellor Kwasi Kwarteng Truss said: ‘It was right in the face of the issues that we had that I acted decisively as that is vitally important to people and businesses across the country.’
Truss was key to the policies set out in the mini Budget and shaping economic policy, which were a critical part of her leadership challenge for the Conservative party over the summer. She has now sacked the Chancellor and says the growth plan will not be achievable as originally set out.
‘My priority is that we deliver the economic stability that this country deserves. We do need to raise our economic growth levels, and we are delivering on the energy price guarantee. I have to act in the interests of the country.’
‘I have made sure that we have economic stability in this country. Jeremy Hunt shares my desire for a high growth economy. We have to deliver the mission in a different way – achieving that stability in a very difficult global world.
‘We need to have a high growth economy but we have to recognise that we are facing a difficult time as a country – we need to focus on long-term sustainable growth.’
Source: https://www.accountancydaily.co/pm-u-turns-corporation-tax-hike