LONDON: The Chancellor’s Interim Budget announced spending cuts, tax hikes and modest pay benefits to help Britain overcome recession. The important announcement regarding the tax is that there will be no changes in the income limits set by the income tax till 2028. With no increase in tax-free income and tax bands, lakhs of people will have to pay more in income tax every year.
In case the tax bands do not change, the government will get additional income in tax revenue according to the increase in salary. The threshold of £12,570, which was previously frozen until 2026, has now been extended by two years to 2028. The top income threshold, which would have been taxed at 40 per cent, was reduced from £150,000 to £125,140. This will again raise taxes on high earners.
The Liss Trust government has kept the £2,000 cap on energy bills in place until 2023. But after 2023, there will be major changes in this benefit. The bill cap will rise to £3,000 after April. The windfall tax imposed on companies has been increased from 25 percent to 35 percent.
The National Minimum Wage for over 23s rose from £9.50 to £10.42 from that April. About twenty lakh people will get the benefit of this increase. This decision will see full-time workers receive a £1,600-a-year increase. An increase of 10 percent in state pension and tax credit payments has been announced.
Chancellor Jeremy Hunt has announced a £3.3bn increase in the NHS budget over two years. In the Autumn Statement, the chancellor suggested making the NHS work more effectively and waste management more efficient. The chancellor proposed that the NHS should strive to achieve Scandinavian quality and Singaporean efficiency to provide better services to taxpayers.
The government will go ahead with a new nuclear power plant project in South East England. With the commissioning of Sais Well-C nuclear plant, it will be possible to meet 7 percent of the country’s total energy needs. The plant will be fully operational by 2030. It will provide employment to 10,000 people and provide electricity to 60 lakh families in the next 50 years.
Two other infrastructure development projects namely Northern Powerhouse Rail and HS-2 and East-West Rail projects will continue. Excise duty exemption for electric vehicles will end in April 2025.
The Rishi government’s first financial statement is to declare that Britain will become another Silicon Valley, that Britain will be a global leader in carbon emissions control, and that there will be no reduction in aid to foreign countries despite the financial crisis.