British finance minister Jeremy Hunt announced a series of tax hikes and a more austere approach to public spending in a tough budget plan on Thursday.
The highest earning Britons will now pay the top 45% rate of tax on income above 125,140 pounds, rather than 150,000 pounds previously. The previous administration of Prime Minister Liz Truss had tried to abolish the top rate altogether.
The Office for Budget Responsibility estimated that 3.2 million people would be pulled into income tax by the now six-year freeze on thresholds, and 2.6 million extra people would become higher rate taxpayers. Because electric cars are increasingly common, Hunt said they would no longer be exempt from vehicle taxes from April 2025.Britain's tax on energy company profits will increase to 35% from 25% from January next year until March 2028. Hunt also announced a new, temporary 45% tax on electricity generators, designed to target profits made by low-carbon generators. Hunt said these changes would raise 14 billion pounds next year.
Hunt said he would cut the business rates tax on company premises but commence a revaluation of business properties from April to make sure the tax reflects the value of properties.Existing increases planned for departmental budgets would be protected in cash terms until 2024/25, Hunt said - meaning a big real-terms cut with inflation running so high. Resource spending would then grow at 1% a year in real terms for the following three years, he said.
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