The government has announced a new plan for growth that introduces a massive package of tax cuts and new investment zones in an effort to increase productivity
Tax cuts include:
- Cancelling the planned rise of the Corporation Tax rate from 19% to 25%;
- Retaining the Diverted Profit Tax rate at 25% and cancelling the Bank Corporation Tax Surcharge cut;
- Reducing the top rate of income tax from 45% to 40% on annual earnings above £150,000, and cut the basic rate of income tax to 19% from April 2023; and
- Scrapping the National Insurance increase and the Health and Social Care Levy.
The Chancellor also announced the formation of new investment zones across the UK. Investment zones will introduce tax cuts for businesses and minimise the need for planning applications to allow for accelerated development.
Businesses in designated areas in investment zones will receive 100% business rates relief on newly occupied and expanded premises. They will also receive full stamp duty land tax relief on land bought for commercial or residential development and a zero rate for employer National Insurance contributions on new employee earnings up to £50,270 per year.