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UK Businesses To Receive Lower, Simpler Taxes

Truss told a meeting of senior business figures in New York on Wednesday that the UK needs lower, simpler taxes to incentivize investment and get more businesses going.

September 21, 2022
6 minutes
minute read

Prime Minister Liz Truss has announced that her government will pursue an "unashamedly pro-business" agenda by lowering and simplifying taxes in the UK. This will make the UK a more attractive place to do business and encourage investment and growth.

Truss told a meeting of senior business figures in New York on Wednesday that the UK needs lower, simpler taxes to incentivize investment and get more businesses going.

Truss said that Chancellor of the Exchequer Kwasi Kwarteng will announce a series of measures later this week designed to deliver on the tax-cutting promises she made during the Conservative Party leadership contest this summer. She added that her government will follow through on pledges to reverse this year's 1.25 percentage-point increase in National Insurance, a payroll tax, and to scrap next year's planned rise in corporation tax to 25% from 19%.

In her remarks, Truss has set out the agenda for her government after just two weeks on the job, one of which was interrupted by the death of Queen Elizabeth II. This is the clearest indication yet of what her government plans to achieve.

On Wednesday, the government unveiled a package that may touch £40 billion to help businesses with soaring energy bills over the winter. This is in addition to the £10 billion already set aside to help businesses with energy costs. On Thursday, ministers aim to publish a plan to overhaul the country’s creaking health care system. This is a much needed reform as the current system is not sustainable in the long term.

Economists are expecting that the new government will set out £200 billion or more in new spending commitments and tax cuts by the end of the week. This will force the government to borrow more at a time when interest rates are rising rapidly, putting the public finances on an unsteady footing.

Parliament will hold an additional session on Friday to hear from Kwarteng before adjourning for the annual party conference season.

Truss said that the government will not be raising corporation tax, as was previously planned. Instead, they will be reversing the National Insurance increases that took place earlier this year. The chancellor will also be announcing various other simplification measures.

According to the Times, Kwarteng's program will include a reduction in stamp duty on home purchases. Government officials declined to deny the report, with Foreign Office Minister Gillian Keegan telling Times Radio: "We'll have to wait and see what the chancellor says. But those kinds of policies that have been used in the past are there to really get the economy moving."

The Conservatives have used a similar measure in the past: former Chancellor Rishi Sunak brought in a temporary freeze on stamp duty during the coronavirus pandemic in order to stimulate the housing market.

The round table in New York included attendees such as BlackRock Inc. Chief Executive Officer Larry Fink, Bain Capital Managing Partner John Connaughton, and General Electric Co. CEO Larry Culp.

Truss said that Kwarteng will also present "a series of supply-side reforms to make our economy more productive in the long term, in areas such as financial services."
She promised to "deal with" the Solvency II and MiFID regulations governing insurance and trading that are a legacy of EU membership. She also promised to get roads, broadband infrastructure, and mobile phone masts built.

This is just the beginning, but our goal is to simplify Britain's taxes and make the country more attractive for investment and businesses. She said that this is part of a long-term plan to improve the business climate in Britain.

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