Category: UK News

Says he is increasing business tax and freezing income tax thresholds in a bid to repair the UK’s damaged economy, reports Asian Lite News

Chancellor Rishi Sunak pledged additional £65 billion to support Britons through to the end of lockdown and beyond, but said he would also need to start clawing back some of the £407 billion that has been spent in total during the pandemic.

Unprecedented levels of spending cannot continue, the chancellor warned, telling MPs he must be “honest” about how he plans to balance the books.

The starting point for paying income tax will increase to £12,570 in April but will stay at that level until April 2026, meaning more people will be dragged into paying tax as wages increase.

“The higher rate threshold will similarly be increased next year, to £50,270, and will then also remain at that level for the same period,” the chancellor said, meaning more people will eventually be in the highest bracket.

Sunak said people’s take home pay will not decrease because of the policy change, but said it does remove the incremental benefit created had thresholds continued to increase with inflation.”

The Office for Budget Responsibility (OBR), a government body set up to provide independent economic forecasts, said the move to freeze income tax thresholds will bring 1.3 million people into the tax system and create one million higher rate taxpayers by 2025-26.

In a bid to protect the poorest households, he said there would be no increase to income tax, national insurance or VAT.

Corporation tax will increase from 19% to 25% in 2023, Sunak said.

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The OBR said the corporation tax rise will raise 3.2% of GDP in revenue by 2025-26 – its highest since 1989-90.

A new “small profits rate” will maintain the 19% rate for firms with profits of £50,000 or less – meaning around 70% of companies – 1.4 million businesses – will be “completely unaffected” by the tax hike.

Sunak said this will help protect small business owners, while reclaiming more in profit from the biggest firms.

And there will be a taper above £50,000, so that only businesses with profits of £250,000 or greater will be taxed at the full 25% rate – around 10% of firms.

Sunak said: “So yes, it’s a tax rise on company profits. But only on the larger, most profitable companies. And only in two years’ time.”

Sunak said there would also be a “super deduction” for companies when they invest in machinery, reducing their tax bill by 130% of the cost.

The chancellor unveiled a three-point plan to support people beyond the end of lockdown, fix the decimated public finances and to rebuild the economy.

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Soon, the new economic campus in Darlington will house 750 officials from ministries including the departments for business, transport and local government, reports Asian Lite News

UK chancellor of Exchequer Rishi Sunak on Wednesday announced that the northern town of Darlington has been chosen as the location for a new economic campus with hundreds of civil servants from several government ministries.

Sunak has confirmed that a Treasury campus will be set up in Darlington and a national infrastructure bank will be situated in Leeds. The new base will be home to 750 senior civil servants.

During his Budget speech Sunak said: “I’m launching the first round of the levelling-up fund today.

“Along with other critical economic departments including Business Energy and Industrial strategy (BEIS), Department for International Trade (DIT) and MHCLG – Ministry of Housing, Communities and Local Government – we will establish a new economic campus in Darlington – redrawing out economic map means rebalancing our economic investment.”

The government, through this so-called levelling-up agenda seeks to diversify policymaking and deliver opportunities to parts of England that are considered “left behind”, according to a report from the Financial Times.

There were reports that several other locations including Bradford and Newcastle upon Tyne were under consideration in the plan.

The decision to create the Treasury’s first major presence outside Whitehall on Teesside is part of the government’s so-called levelling-up agenda, which seeks to diversify policymaking and deliver opportunities to parts of England that are considered “left behind”.

Soon, the ‘Treasury North’ will house 750 officials from ministries including the departments for business, transport and local government.

In a recorded message shared on social media prior to the budget announcement, Sunak said the decision had been made after “a lot of thought and energy”, and he was “really excited about it”.

Revival of Teesside

The Chancellor told the commons during the Budget speech: “Our future economy demands a different economic geography. If we are serious about wanting to level up, that starts with the institutions of economic power.”

He said the revival of Teesside, an area with historic links to the steel industry, was emblematic of the government’s efforts to tackle regional inequality. Teesside will also be one of eight new free ports, which the chancellor described as “special economic zones” with tax benefits and simpler planning rules.

Sunak said: “When I look to the future of Teesside I see old industrial sites being used to capture and store carbon, vaccines being manufactured, offshore wind turbines creating clean energy for the rest of the country.”

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Meanwhile, the local businesses and officials have welcomed the news that a “significant part” of the Treasury is to relocate from London to Darlington.

The BBC quoted Heather Scott, leader of Darlington Council, describing it as “fantastic news for the area”.

Peter Gibson, Darlington’s Conservative MP, said it showed the government had “faith and trust” in the town.

The chancellor had been approached by civic leaders from across the north, with Bradford, Leeds and Newcastle also thought to have been in the running for the move.

Karl Pemberton, chair of the North East branch of the Institute of Directors, described it as “one of the most important announcements for the North East in decades”.

He said: “This will help ‘level up’ our area – where the government leads others should follow.”

The plans to bring the new economic campus to the region have previously received cross party support from MPs, council leaders and other politicians. Hundreds of businesses and dozens of Northern MPs urging the Chancellor to bring the jobs to the Tees Valley.

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